Pakistan reached an agreement with the International Monetary Fund that could unlock another $1.2 billion in financing, offering fresh support to an economy grappling with elevated inflation and the fallout from the Middle East conflict.
The deal, a staff-level agreement which still needs approval from the IMF’s Executive Board, would give Pakistan about $1 billion under its main lending program and another $210 million under a separate climate fund. That would bring total payouts under the two programs to about $5.7 billion.
The IMF said Pakistan had managed to preserve economic stability despite higher energy prices and supply disruptions stemming from the Middle East conflict. It estimated the economy grew 3.6% in the fiscal year 2026, while foreign-exchange reserves rose to about $21.5 billion by the end of September.
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The agreement reflects Pakistan’s improving economic outlook and progress on reforms despite its exposure to the conflict. The additional funding would give Islamabad another buffer to build its foreign-exchange reserves and sustain its recovery after years of economic turmoil.
Pakistan is particularly exposed to the turmoil because much of its energy imports passes through the Strait of Hormuz, the narrow waterway that carries oil and gas from Gulf producers to global markets.
The IMF said headline inflation, after peaking in May, moderated to about 10.3% percent in September, while core inflation remained contained. It said the State Bank of Pakistan should maintain an appropriately tight policy stance to ensure inflation returns durably to the central bank’s target range.
Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.
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