The International Monetary Fund (IMF) on Tuesday approved a fresh loan package reportedly amounting to nearly ₹30,000 crore (approximately USD 3.5billion) in a significant development for Pakistan’s struggling economy. The decision comes despite Pakistan’s earlier difficulties in meeting repayment obligations linked to previous IMF support programmes.
In a statement by the global financial aid provider, IMF said, the funds were approved noticing Islamabad’s “advancing reforms” to bolster the economy amid acute financial crisis for two years.
“Today, the Executive Board of the International Monetary Fund (IMF) completed the second review of Pakistan’s economic reform program supported by the EFF and the first review of Pakistan’s program supported by the RSF. This decision allows for an immediate disbursement of around US$1 billion (SDR 760 million) under the EFF and around US$200 million (SDR 154 million) under the RSF, bringing total disbursements under the two arrangements to about $3.3 billion (SDR 2,434 billion),” IMF said in a statement.
The assistance was offered following an IMF Executive Board Meeting on Tuesday where the stakeholders reviewed the policy priorities and prior performance of Islamabad deemed mandatory for new financial aid and a bailout.
“Policy priorities remain centered on maintaining macroeconomic stability and advancing reforms to strengthen public finances, enhance competition, raise productivity and competitiveness, bolster the social safety net and human capital, reform SOEs, and improve public service provision and energy sector viability. The recent floods highlight the urgency of moving swiftly on climate-related reforms to build resilience to the frequent natural disasters that Pakistan faces. The authorities are making progress on such reforms, supported by the RSF,” the statement added.
The committee observed that Pakistan’s policy efforts under the EFF have delivered significant progress in stabilizing the economy and rebuilding confidence amid a challenging global environment and recent severe floods. Fiscal performance has been strong, with a primary surplus of 1.3 percent of GDP achieved in FY25, in line with targets.
IMF’s deputy managing director Nigel Clarke stated that the IMF’s tight monetary monetary policy stance has been pivotal in reducing inflation in Pakistan hoping that the current assistance will continue the Islamabad’s efforts to deepen the reforms amid the country’s economic meltdown.
“The authorities’ commitment to the FY2026 primary balance target while accommodating urgent relief needs in response to the recent severe floods is a strong signal of their commitment to build fiscal policy credibility. In parallel, advancing reforms to raise revenues via tax policy simplification and base broadening is key to achieving fiscal sustainability and building the fiscal space necessary to boost climate resilience, social protection, human capital development, and public investment,” he added.
