The International Monetary Fund and Pakistan have reached a staff-level agreement following reviews of two major loan programs, paving the way for the release of 1.2 billion dollars in funding. The agreement is subject to approval by the Fund's Executive Board and would bring total disbursements under the programs to about 4.5 billion dollars.

The lender said Pakistan’s economic policies have helped strengthen the economy and rebuild market confidence. Economic activity has gained momentum after a recovery in the last fiscal year, while inflation and the current account balance have remained contained and external buffers have improved.

However, the International Monetary Fund warned that the conflict in the Middle East casts a cloud over the outlook. Volatile energy prices and tighter global financial conditions could increase inflationary pressures and weigh on growth. Pakistan has pledged to maintain prudent macroeconomic policies, continue structural reforms, and strengthen social protection to safeguard recent economic gains.