The International Monetary Fund (IMF) approved the disbursement of approximately $1 billion to Pakistan on Friday, following the executive board’s completion of the first review of the country’s economic reform program under the Extended Fund Facility (EFF).
This latest disbursement raises the total released under the 37-month EFF arrangement—approved on September 25, 2024—to around $2.1 billion. The IMF board also approved Pakistan’s request for a new Resilience and Sustainability Facility (RSF) program, granting access to about $1.4 billion.
The EFF program aims to support Pakistan in building resilience and achieving sustainable growth. According to the IMF, “Pakistan’s policy efforts under the EFF have already delivered significant progress in stabilizing the economy and rebuilding confidence, amidst a challenging global environment.”
Key priorities under the EFF include restoring macroeconomic sustainability through consistent implementation of sound policies, rebuilding foreign reserves, and broadening the tax base. The program also focuses on strengthening competition, boosting productivity, enhancing public services, securing the energy sector’s viability, and advancing climate resilience efforts.
“Fiscal performance has been strong, with a primary surplus of 2 per cent of GDP achieved in the first half of FY25, keeping Pakistan on track to meet the end-FY25 target of 2.1 per cent of GDP,” the IMF said in its statement. “Inflation fell to a historic low of 0.3 per cent in April, and progress on disinflation and steadier domestic and external conditions, have allowed the State Bank of Pakistan to cut the policy rate by a total of 1100 bps since June 2025.”
The IMF also reported that gross reserves reached $10.3 billion at the end of April—up from $9.4 billion in August 2024—and are projected to climb to $13.9 billion by the end of June 2025.
The newly approved RSF is intended to help Pakistan reduce its vulnerabilities to natural disasters and bolster economic and climate resilience. The initiative prioritizes improvements in disaster response coordination, more efficient water usage, and stronger public investment frameworks at both federal and provincial levels.
“Pakistan has made important progress in restoring macroeconomic stability despite a challenging environment,” said Nigel Clarke, IMF deputy managing director and chair. “Since the approval of the EFF, the economy continues to recover, with inflation sharply lower and external buffers notably stronger. Risks to the outlook remain elevated, however, particularly from global economic policy uncertainty, rising geopolitical tensions, and persistent domestic vulnerabilities.”
“Against this backdrop, the authorities need to maintain sound macroeconomic policies and accelerate reforms to safeguard the macroeconomic gains and underpin stronger and sustainable, private sector-led medium-term growth,” Clarke added.
