IMF reaches staff-level deal with Pakistan over another $1.2B loan

The IMF on Wednesday said it has reached a staff-level agreement with Pakistan under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), paving the way for a disbursement of about $1.2 billion, pending approval by the IMF Executive Board.

If approved, Pakistan will receive $1 billion under the EFF and an additional $200 million under the RSF, raising the total disbursements under both programs to approximately $3.3 billion.

The announcement came after the IMF team's two-week-long visit to Karachi and Islamabad from Sept. 24 to Oct. 8.

In a statement, the IMF said Pakistan's economic recovery remains on track, with the first current account surplus in 14 years, improved fiscal performance, and inflation staying within target.

However, it warned that recent floods affecting nearly 7 million people have slowed growth.

"The recent floods, which have affected nearly 7 million people, caused over 1,000 deaths, and severely damaged housing, public infrastructure, and agricultural land, have weighed on the outlook, particularly of the agriculture sector," it said.

The global lender said that Pakistani authorities reaffirmed their commitment to the EFF- and RSF-supported programs, and to maintaining sound and prudent macroeconomic policies while advancing ongoing structural reforms.

Last year, the IMF and Pakistan reached a staff-level agreement on the final review of a $3-billion bailout package.