The Executive Board of the International Monetary Fund (IMF) is scheduled to meet on May 9 to discuss Pakistan's economic arrangements, including a staff-level agreement for a new $1.3 billion climate resilience loan and the first review of the country’s ongoing $7 billion bailout programme.

The board's discussions will cover two significant aspects: the first review under Pakistan’s Extended Fund Facility (EFF) and a request for an arrangement under the Resilience and Sustainability Facility (RSF). This comes after Finance Minister Muhammad Aurangzeb’s recent visit to Washington, where he expressed optimism regarding the board’s approval in early May.

Approval from the IMF board would unlock the disbursement of a $1 billion tranche, part of the financing Pakistan secured earlier this year under its 2024 arrangement. The release of these funds is critical for Pakistan’s fragile economy, providing much-needed external financing and bolstering investor confidence.

Critical role of IMF programme

Pakistan and the IMF reached a landmark agreement in July 2024 for a three-year, $7 billion aid package. This new programme is designed to stabilize Pakistan’s economy and pave the way for stronger, more inclusive, and resilient growth. Under the ongoing 37-month EFF programme, the country must undergo six reviews throughout the course of the bailout, with each review playing a key role in unlocking future disbursements.

The next tranche of approximately $1 billion is contingent on Pakistan’s successful performance in the upcoming review. In March 2025, the first biannual review of the $7 billion programme concluded positively, marking progress in key areas without the imposition of additional revenue measures.

Nathan Porter, the IMF mission chief, praised Pakistan's commitment to fiscal consolidation, stating that it would “durably reduce public debt” and accelerate reforms to improve energy sector viability. He also acknowledged the government's efforts to maintain a sufficiently tight monetary policy to curb inflation.

Focus on climate resilience financing

In addition to the ongoing bailout programme, Pakistan has requested over $1 billion in additional financing from the IMF for climate resilience efforts.

A separate IMF technical mission visited Pakistan recently to assess this request, highlighting the critical role of climate change mitigation in the country’s future economic planning.