Pakistan has received a significant economic boost after the International Monetary Fund (IMF) released a total of $1.2 billion, confirmed by the State Bank of Pakistan (SBP). According to SBP officials, $1 billion of this amount has been disbursed under the Extended Fund Facility (EFF), while an additional $200 million has been released as climate-financing support through the Resilience and Sustainability Facility (RSF).
The IMF’s Executive Board approved the disbursement on Monday, keeping both loan programmes—collectively worth $8.4 billion—on track. This brings total releases under Pakistan’s current EFF and RSF programs to $3.3 billion.
In its assessment, the IMF stated that Pakistan has made significant progress on structural reforms, maintaining macroeconomic stability despite a difficult global economic situation and the impact of recent devastating floods.
According to the Fund, Pakistan recorded a primary budget surplus of 1.3% for FY2025, meeting program targets. Although inflation rose in recent months, the IMF termed the increase temporary, citing disruptions in the food supply chain.
Foreign exchange reserves have also strengthened, rising to $14.5 billion, with further improvement expected in the coming fiscal year.
Following the Executive Board meeting, IMF Deputy Managing Director Nigel Clarke praised Pakistan’s policy efforts, highlighting improvements in economic growth indicators, declining inflation expectations, and reduced fiscal and external deficits. However, he cautioned that Pakistan must continue implementing reforms with discipline to ensure sustainable, private-sector-driven growth amid global uncertainty.
To secure the Executive Board’s approval, Pakistan completed two key prior actions:
- Issuing a guarantee to restructure an undercapitalized bank, and
- Publishing the Governance and Corruption Diagnostic Assessment Report, a politically sensitive step for authorities.
The $1.1 billion is the third tranche under Pakistan’s $7 billion stabilisation package, evaluated on economic performance for the January–June period of the last fiscal year.
To keep the programme moving forward, the IMF also accepted Pakistan’s request for waivers on unmet conditions for the end-June review and agreed to relax at least three conditions for the upcoming review cycle