Pakistan, which is struggling with a financial crisis, has received a huge relief from the International Monetary Fund (IMF). The IMF staff has reached an agreement to provide an additional $1.21 billion to the country. However, the release of these funds requires the approval of the IMF Executive Board.

The agreement includes the fourth review of Pakistan's 37-month 'Extended Fund Facility' (EFF) program and the third review of the 28-month 'Resilience and Sustainability Facility' (RSF). After the board's approval, about $1 billion will be available under the EFF and another $210 million under the RSF.

This will bring the total funds available to Pakistan under these two programs to about $5.7 billion.

IMF's assessment of the economic situation
The IMF has estimated that Pakistan's economy will grow by 3.6 percent in fiscal year 2026. Growth in the first three quarters was recorded at 4 percent. Inflation, which peaked in May, declined to 10.3 percent in September.

Foreign exchange reserves increased to $21.5 billion at the end of September. Remittances from Pakistanis abroad also helped keep the current account deficit under control.

Threats remain
, but the IMF warned that Pakistan's economic recovery still faces many challenges. It said that geopolitical tensions, changes in energy prices, high interest rates worldwide, and trade disruptions are likely to affect the economy. It

suggested that digital invoicing and risk-based audits be implemented to increase tax collections. It called for reforms in the power sector, control of subsidies, and discipline in government spending. It instructed the Central Bank of Pakistan to continue tight monetary policy until inflation stabilizes within the target range.