IMF board greenlights over $1.2bn for Pakistan

Pakistan has secured approval for its next over $1.2 billion tranche from the International Monetary Fund (IMF) after successfully completing all key economic benchmarks.

The disbursement falls under the country’s ongoing $7 billion Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programs.

The IMF Executive Board met in Washington to review Pakistan’s staff-level agreement and overall economic progress. Officials confirmed that Pakistan met its commitments under the program, leading to the approval of the next tranche.

IMF officials noted that sustainable reforms are the need of the hour for Pakistan’s economy, especially in the wake of recent climate-driven disasters.

Progress under EFF program

Pakistan has already received two major tranches:

• $1 billion in September 2024

• $1 billion in May 2025

The latest approval follows Pakistan’s successful completion of the second economic review, with the IMF acknowledging that all structural and quantitative targets were achieved.

Economic improvements highlighted

The Ministry of Finance reported several key indicators showing improvement:

• Pakistan posted a current account surplus for the first time in 14 years.

• Inflation has remained controlled, supported by committed fiscal discipline.

• Foreign exchange reserves strengthened, improving market confidence.

Officials added that the government is committed to policies aimed at keeping inflation within target, a point confirmed by IMF-linked sources.

The IMF also stated that the government will continue providing necessary assistance to flood-affected communities, calling it essential for inclusive recovery.

Energy sector and climate-linked reforms

The IMF praised Pakistan’s progress on reforms for the revival and long-term sustainability of the energy sector. These include:

• Debt reduction measures

• Governance improvements

• Reforms in tariff management and energy planning

IMF officials stressed that comprehensive climate and structural reforms are crucial, especially after the country faced devastating floods in recent years.
They highlighted the importance of policies that reduce climate risk and enhance institutional capacity, noting their centrality to Pakistan’s long-term stability.

Governance and structural reforms

Major initiatives under the program include:

• Completion of the Governance and Corruption Diagnosis Report

• Measures to enhance transparency and public sector management

• Integration of climate resilience into long-term policy frameworks

According to the IMF, the government remains committed to advancing structural reforms, maintaining fiscal discipline, and strengthening institutional governance.

Officials emphasized that Pakistan’s economic recovery—supported by global confidence—will depend on the continuity of reforms and disciplined implementation.