Pakistan Confident of Securing $1.2 Billion IMF Staff-Level Agreement This Week, Says Finance Minister

Pakistan is nearing a critical milestone in its ongoing economic recovery efforts, as the government expresses strong confidence in securing a staff-level agreement with the International Monetary Fund this week. The expected deal, valued at $1.2 billion, represents a key step in advancing macroeconomic stability and gaining much-needed fiscal support. Finance Minister Muhammad Aurangzeb, during the IMF-World Bank annual meetings in Washington, described the recent discussions with IMF officials as productive and forward-moving. The anticipated agreement covers the second review of the $7 billion Extended Fund Facility and the first review of the $1.4 billion Resilience and Sustainability Facility. Although the IMF mission concluded its recent visit to Pakistan without a final agreement, follow-up engagement has continued to address pending reforms, particularly in areas tied to fiscal targets and structural benchmarks.

Once the IMF’s Executive Board grants approval, the country will receive a $1.24 billion tranche, providing timely assistance as it navigates challenges including persistent inflation, exchange rate pressure, and budget constraints. The IMF program, which began in September 2024, has played a pivotal role in stabilizing Pakistan’s $370 billion economy following a prolonged period of economic strain.

As part of its financial strategy, Pakistan also intends to return to international debt markets by launching its first green Panda bond—denominated in Chinese yuan—before the end of 2025. In addition, the government is planning to issue an international bond exceeding $1 billion next year, with flexible options in terms of currency and structure, including euro, dollar, and Islamic Sukuk formats.

Privatization efforts are also expected to accelerate, with a renewed focus ahead of June 2026 after a period of limited progress. Plans are underway to divest three power distribution companies and Pakistan International Airlines, a move that would mark the country’s first significant privatization in nearly two decades. PIA’s recent resumption of key European and UK routes has increased investor interest, with five prominent local groups reportedly exploring bids. Final offers are anticipated later this year, following a previously unsuccessful attempt in 2024.