ISLAMABAD( The COW News Digital) Pakistan and the International Monetary Fund (IMF) have reached a long-awaited staff-level agreement, marking a major breakthrough in the country’s ongoing efforts to stabilize its struggling economy. Under the agreement, Pakistan will receive $1.2 billion after approval from the IMF’s Executive Board.
In a statement issued on Tuesday, the IMF confirmed that the understanding was reached under the Extended Fund Facility (EFF) and emphasized that Pakistan’s economic program is gradually regaining stability and restoring market confidence.
According to the IMF communiqué, Pakistan’s current account recorded a surplus for the first time in 14 years during the 2025 fiscal year. The statement noted that fiscal performance exceeded program targets, inflation remained under control, and foreign exchange reserves showed notable improvement. Economic growth for 2025 is projected between 3.25% and 3.5%, signaling cautious optimism after months of volatility.
The IMF also praised Pakistan’s environmental and climate reform initiatives, acknowledging the government’s commitment to addressing climate-related risks through policy continuity and structural reforms. The Fund particularly highlighted the devastating floods that struck the country earlier this year, which left over 1,000 people dead and caused widespread damage to homes and crops.
“Comprehensive reforms and consistent policy implementation are vital to mitigate environmental vulnerabilities and ensure sustainable growth,” the IMF said.
The statement further recognized Pakistan’s resolve to improve fiscal discipline, enhance energy sector sustainability, and pursue structural reforms aimed at promoting long-term stability.
Earlier, Finance Minister Senator Muhammad Aurangzeb had hinted at positive progress in talks, describing discussions with the IMF mission as “constructive.” He said Pakistan plans to issue its first-ever Green Panda Bond by the end of the year to diversify funding sources.
The minister also disclosed that significant progress has been made toward the privatization of the national airline and three power distribution companies (DISCOs). He added that the resumption of direct flights to Europe and the UK has boosted investor confidence, with five consortiums expressing interest in acquiring stakes in the national carrier.
The staff-level agreement is expected to pave the way for much-needed financial inflows, bolstering Pakistan’s foreign reserves and providing relief to an economy burdened by inflation, debt, and regional instability.
