Pakistan has achieved a staff-level agreement with the International Monetary Fund (IMF) concerning the first review of its ongoing 37-month Extended Fund Facility (EFF) and a new 28-month Resilience and Sustainability Facility (RSF) arrangement. This agreement, pending approval from the IMF’s Executive Board, will enable Pakistan to access approximately $1 billion under the EFF and an additional $1.3 billion through the RSF, aimed at enhancing climate resilience.
The RSF is designed to support countries implementing reforms to bolster resilience against climate-related challenges. Pakistan’s inclusion in this facility underscores its commitment to addressing climate vulnerabilities through adaptation measures. The RSF funds are repayable over 30 years, including a 10-year grace period, and typically offer more favorable terms compared to the EFF.
Nathan Porter, the IMF’s mission chief to Pakistan, acknowledged the country’s progress over the past 18 months in restoring macroeconomic stability and rebuilding confidence despite a challenging global environment. He noted that inflation has declined to its lowest level since 2015, financial conditions have improved, and external balances are stronger. However, Porter also highlighted ongoing risks, including potential geopolitical shocks, tightening global financial conditions, and climate-related challenges, emphasizing the need for continued reforms to sustain economic stability and growth.
This development marks a significant step for Pakistan in securing financial support to address both economic and climate-related challenges, reflecting the IMF’s recognition of the country’s reform efforts and commitment to sustainable development.
