The International Monetary Fund announced that its Executive Board has completed the third review of Pakistan’s Extended Fund Facility and the second review of its Resilience and Sustainability Facility arrangement, enabling immediate disbursements of about USD 1.1 billion and USD 220 million. Total disbursements under the two arrangements now amount to about USD 4.8 billion, after the Board assessed that Pakistan’s program implementation has continued to support macroeconomic stabilization and progress on climate resilience reforms. Under the Extended Fund Facility, the IMF pointed to strong fiscal performance, with an FY26 underlying primary surplus of 1.6 percent of GDP expected in line with targets, GDP growth accelerating, the current account broadly balanced in the first nine months of FY26, and gross reserves rising to USD 16 billion at end-December from USD 14.5 billion at end-June 2025. It said inflation has risen as higher global commodity prices passed through to domestic energy prices and emphasized continued fiscal consolidation, tighter monetary settings, exchange rate flexibility, bank capitalization, cost-reflective fuel and utility pricing with targeted support for vulnerable consumers, and further reforms on tax collection, state-owned enterprises, privatization, anti-corruption and the business environment. The Resilience and Sustainability Facility remains focused on natural disaster resilience, more efficient water use and pricing, stronger federal-provincial disaster coordination, and improved climate-risk information and disclosure by banks and corporates.

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