IMF reaches tentative $1.21 billion bailout deal with Pakistan

The International Monetary Fund (IMF) and Pakistan have reached a tentative $1.21 billion bailout agreement, the lender announced on Wednesday. The South Asian nation is facing rising food and fuel prices, along with high unemployment, and is seeking financial assistance to stabilize its economy. The deal still requires approval from the IMF Executive Board.

IMF negotiator Iva Petrova stated that Pakistan has effectively managed the impact of the Middle East conflict, thanks to strong policies that have maintained macroeconomic stability. The country's economy expanded by 4% in the first three quarters of fiscal 2026, with an estimated full-year growth of 3.6%, according to the IMF.

However, Petrova attributed a slowdown in momentum to higher energy prices and supply disruptions. Inflation dipped to approximately 10.3% in September after peaking in May, while core inflation remained under control, according to Petrova. Pakistan continues to rely on external financing to maintain foreign exchange reserves and fulfill debt repayments.

The nation's vulnerability is heightened due to its dependence on Gulf energy imports, remittances, and regional financing, as highlighted by S&P Global Market Intelligence economist Ahmad Mobeen earlier this year. Pakistan has previously sought IMF support to address its balance-of-payments crisis. The story emphasizes the importance of the reported bailout deal, urging readers to support trusted news reporting by designating the source as their preferred option on Google.