Pakistan: Third Review Under the Extended Arrangement Under the Extended Fund Facility and Second Review Under the Resilience and Sustainability Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Pakistan

International Monetary Fund

No 2026/101, IMF Staff Country Reports from International Monetary Fund

Abstract: Strong policy implementation has continued to support Pakistan’s economic recovery, build confidence, and bolster its resilience to shocks. GDP growth accelerated in FY26H1, while inflation remained contained, the current account was broadly balanced, and reserve rebuilding exceeded earlier projections. However, the impact of the war in the Middle East clouds Pakistan’s near-term outlook and there is great uncertainty about how developments will unfold. Under the baseline scenario, the war is expected to put upward pressure on inflation and weigh on growth and the balance of payments, but the overall impact is expected to be contained. However, downside risks are high.

Pages: 131
Date: 2026-05-14
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