Ankara:Pakistan has reached a staff-level agreement with the International Monetary Fund (IMF) which could unlock approximately $1.2 billion in financing as the nation confronts elevated energy costs and supply disruptions related to the Middle East conflict.

According to Anadolu Agency, the agreement remains subject to approval by the IMF's Executive Board. Once approved, Pakistan will receive around $1 billion under the Extended Fund Facility and an additional $210 million under the Resilience and Sustainability Facility, which supports climate-related reforms.

These disbursements would increase total financing released under the two programs to about $5.7 billion. The IMF noted that Pakistan has managed to preserve economic stability despite the conflict's impact, forecasting an economic growth of 3.6% for the fiscal year 2026.

The country faces higher energy prices and supply disruptions that have affected economic momentum, although foreign exchange reserves rose to approximately $21.5 billion by the end of September. Headline inflation reduced to about 10.3% in September after reaching its peak in May, while core inflation remained stable.

The IMF emphasized that the State Bank of Pakistan should maintain a tight monetary policy stance to ensure inflation returns sustainably to its target range. The additional financing is expected to bolster Pakistan's efforts to enhance its foreign exchange reserves and sustain economic recovery.

Pakistan continues to be vulnerable to disruptions in Gulf energy supplies, with a significant portion of its energy imports transiting through the Strait of Hormuz.