IMF Approves ₨ 336 billion for Pakistan Amid Ongoing Economic Reforms

The International Monetary Fund (IMF) has approved a fresh ₨336 billion disbursement for Pakistan, offering much-needed financial support at a time when the country is grappling with economic strain, climate shocks, and global financial uncertainty.

The decision was taken during an IMF Executive Board meeting in Washington, where the Fund cleared ₨280 billion under the Extended Fund Facility (EFF) and an additional ₨56 billion through the climate-focused Resilience and Sustainability Facility (RSF). The approval reflects growing confidence in Pakistan’s reform agenda despite a difficult year marked by devastating floods and rising global interest rates.

Pakistan’s 24th IMF Programme Moves Forward

Pakistan is currently operating under its 24th IMF programme, one of the longest-running engagements between the country and the global lender. With the latest release, Pakistan has now received around £2.4 billion (approximately ₨898 billion) under the ongoing IMF arrangements.

In its statement, the IMF praised Pakistan’s “strong programme implementation,” highlighting progress on key economic targets. The Fund noted that the government achieved a primary surplus of 1.3 percent of GDP in fiscal year 2025, a major indicator of improved fiscal management.

Reserves Rise, External Stability Improves

One of the most positive developments acknowledged by the IMF is the improvement in Pakistan’s external position. Foreign exchange reserves have climbed to £10.8 billion, up from £7.05 billion recorded during the same period last year.

This increase has helped stabilize the currency market and ease pressure on external payments, offering temporary relief to policymakers navigating a fragile economic environment.

Inflation Pressures Still a Concern

While acknowledging progress, the IMF also flagged ongoing challenges. Inflation has remained elevated, largely due to flood-related food supply disruptions, which pushed prices higher across the country.

However, the Fund expects inflationary pressures to gradually ease in the coming months as supply conditions improve and macroeconomic stability strengthens.

IMF Calls for Continued Discipline and Reforms

IMF Deputy Managing Director Nigel Clarke stressed that Pakistan must stay the course on reforms to ensure long-term stability. The Fund urged authorities to maintain strict fiscal discipline, accelerate energy sector reforms, and continue restructuring state-owned enterprises, which remain a burden on public finances.

The IMF also emphasized the need to expand and protect social safety programmes, ensuring vulnerable communities are shielded from the impact of adjustment measures.

Government Sees Boost to Confidence

Officials in Islamabad welcomed the IMF’s approval, calling it a strong signal of international confidence in Pakistan’s economic direction. They believe the decision will help stabilize markets, encourage investment, and support the country’s gradual recovery.