Pakistan has reached a staff-level agreement (SLA) with the International Monetary Fund (IMF) under its Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), following high-level diplomatic engagements in Washington, as the country grapples with rising external debt and economic strain.
According to IMF officials, the SLA will provide Pakistan access to approximately $1 billion (SDR 760 million) under the EFF and about $200 million (SDR 154 million) under the RSF, bringing total potential disbursements under the two programs to around $3.3 billion. The agreement is subject to approval by the IMF Executive Board.
The development comes amid a backdrop of Pakistan’s increasing economic pressures. The country’s total external debt reached about $135 billion in the second quarter of 2025, including approximately $30 billion owed to China, one of its largest bilateral creditors. Pakistan is required to meet over $23 billion in external debt repayments in the current fiscal year, with total foreign debt repayments and interest estimated at $30.35 billion.
As per the Pakistan Economic Survey 2024-25, the nation’s total debt stood at 76.01 trillion Pakistani rupees (around $267 billion) at the end of March 2025, with domestic debt comprising 51.52 trillion rupees ($180 billion) and external debt at 24.49 trillion rupees ($86 billion). Public concerns over mounting debt have intensified the government’s push for international support.
Finance Minister Muhammad Aurangzeb held meetings in Washington on October 13 and 14 with senior US Treasury officials, investors, and multilateral institutions to seek investment and reform support. The outreach aims to consolidate investor confidence, accelerate project implementation, and strengthen financial partnerships.
Army Chief General Asim Munir and Prime Minister Shehbaz Sharif have also engaged in diplomatic efforts with the US administration to secure political and financial backing. The staff-level agreement follows Pakistan’s prior negotiations with the US, including a tariff agreement in July that reduced duties on Pakistani exports to 19 per cent.
IMF team leader Iva Petrova noted that the agreement reflects Pakistan’s strong implementation track record and continued commitment to the EFF and RSF programs. Special Drawing Rights (SDRs), which form part of the disbursement, are an international reserve asset that allows member countries to supplement currency reserves and exchange them for freely usable money when needed.
Despite these developments, Pakistan will still require consent from its creditors for debt rollovers to manage repayments effectively, alongside maintaining fiscal prudence and securing additional international financing. The agreement marks a critical step in stabilising Pakistan’s economy amid internal strife, a Taliban offensive at the Afghan border, and economic vulnerabilities exacerbated by external debt obligations.
