An International Monetary Fund (IMF) team, led by Nathan Porter, recently concluded discussions with Pakistani authorities concerning the first review of Pakistan's economic program under the Extended Fund Facility (EFF) and a new arrangement under the Resilience and Sustainability Facility (RSF). The talks took place from February 24 to March 14, 2025, in Karachi and Islamabad, followed by virtual meetings.
Porter announced that a staff-level agreement has been reached on both the first review of the 37-month EFF arrangement and a new 28-month RSF arrangement. The total access over these 28 months is approximately $1.3 billion (SDR 1 billion). This agreement awaits approval from the IMF's Executive Board. Upon approval, Pakistan will gain access to about US$1.0 billion (SDR 760 million) under the EFF, increasing total disbursements to around US$2.0 billion.
"Over the past 18 months," Porter stated, "Pakistan has made significant progress in restoring macroeconomic stability and rebuilding confidence despite a challenging global environment." He noted improvements such as declining inflation rates since 2015, improved financial conditions, narrowed sovereign spreads, and stronger external balances. However, he cautioned about potential risks including policy slippages due to pressures for easing policies and geopolitical shocks affecting commodity prices.
Porter emphasized that it is crucial for Pakistan to maintain its current course by strengthening public finances, ensuring price stability, rebuilding external buffers, and eliminating distortions for sustained private sector-led growth.
The Pakistani authorities expressed their commitment to advancing reforms under both the EFF-supported program and RSF-supported program to address vulnerabilities related to climate shocks. They aim to build resilience through adaptation measures.
"The IMF team is grateful to the Pakistani authorities," Porter added, "private sector, and development partners for their hospitality during the visit to Islamabad and Karachi."