Islamabad (TDI): The International Monetary Fund (IMF) has approved the release of $1.32 billion in fresh financing for Pakistan after completing key reviews of the country’s ongoing reform programs, providing a major boost to Islamabad’s efforts to stabilise the economy and strengthen foreign exchange reserves.
According to an official IMF statement, the Executive Board completed the third review of Pakistan’s Extended Fund Facility (EFF) program and the second review under the Resilience and Sustainability Facility (RSF), allowing for the immediate release of approximately $1.1 billion under the EFF and around $220 million under the RSF.
Finance Minister Muhammad Aurangzeb confirmed the development, while Deputy Prime Minister Ishaq Dar described the approval as a reflection of international confidence in the government’s economic management and reform measures.
Dar also said Pakistan had successfully countered diplomatic efforts aimed at opposing the IMF approval and reaffirmed the government’s commitment to continuing reforms alongside public relief initiatives.
The IMF noted that Pakistan’s economic program had shown measurable progress despite global uncertainty and ongoing regional tensions, including the Middle East conflict.
The lender said Pakistan had achieved macroeconomic stabilisation through disciplined fiscal and monetary policies, with GDP growth accelerating and inflation remaining relatively contained during the first nine months of fiscal year 2026.
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According to the IMF, Pakistan’s foreign exchange reserves rose to $16 billion by the end of December 2025, compared to $14.5 billion six months earlier, and are expected to continue improving.
The Fund projected a primary fiscal surplus of 1.6% of GDP for FY26, in line with program targets. The IMF also stressed the importance of maintaining reform momentum, including broadening the tax base, improving tax compliance, reforming state-owned enterprises, strengthening anti-corruption institutions and advancing privatisation efforts.
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The statement highlighted ongoing concerns about inflationary pressures linked to global commodity prices and energy costs, urging authorities to maintain prudent monetary policy through the State Bank of Pakistan.
