US$1.2bil IMF bailout for Pakistan clears key hurdle

International Monetary Fund has reached a staff-level agreement with Pakistani authorities, the organization said Wednesday, a step forward in securing a multi-billion dollar bailout deal with the global lender.

The agreement, which would give Pakistan access to about US$1.2 billion, still requires approval from the IMF Executive Board.

IMF negotiator Iva Petrova said Pakistani officials “have successfully navigated the impact of the Middle East conflict, and strong policies have helped preserve macroeconomic stability.”

Pakistan, a key mediator between the US and Iran, has seen soaring prices that threatened an already fragile economy during months of fighting and disruptions to global energy shipments.

In the past year, demonstrators have held protests in major cities, calling for relief from spiking food, fuel and rent prices, and help finding secure employment.

The South Asian country has seen real GDP growth of 4% in the first three quarters of fiscal year 2026, Petrova said, “although higher energy prices and supply disruptions weakened somewhat the momentum.”

The fiscal year’s overall growth is estimated at 3.6%.

“Headline inflation, after peaking in May, moderated to about 10.3% in September, while core inflation remained contained,” Petrova added.