IMF reaches staff deal with Pakistan, potentially unlocking $1.2 billion

The International Monetary Fund has reached a staff-level agreement with Pakistani authorities, paving the way for a $1.2 billion bailout, the organization announced on Wednesday. This step forward in securing the deal with the global lender still requires approval from the IMF Executive Board. IMF negotiator Iva Petrova stated that Pakistani officials have successfully managed the impact of the Middle East conflict, and robust policies have helped maintain macroeconomic stability.

Pakistan, a crucial mediator between the United States and Iran, has faced soaring prices during months of conflict, threatening its already fragile economy. Demonstrators have taken to the streets in major cities, demanding relief from soaring food, fuel, and rent prices, as well as assistance in finding stable employment. Despite higher energy prices and supply disruptions, the South Asian country has experienced real GDP growth of 4 percent in the first three quarters of fiscal year 2026, according to Petrova.

However, the overall growth for the fiscal year is estimated at 3.6 percent. Headline inflation peaked in May but has since moderated to around 10.3 percent in September, while core inflation remains contained. The IMF has released $1.2 billion to Pakistan, tightening conditions for the country to receive further loans. The IMF board has also approved a $1 billion payout to Pakistan, and the country is nearing a new $1 billion IMF payment.