IMF Approves $1.2 Billion Loan Program for Pakistan

ISLAMABAD: The International Monetary Fund’s Executive Board has completed the second review of Pakistan’s Extended Fund Facility (EFF) and the first review of its Resilience and Sustainability Facility (RSF), unlocking immediate disbursements of about $1 billion and $200 million, respectively.

The decision, announced in Washington, DC, on Monday, brings total disbursements under the two arrangements to approximately $3.3 billion.

The IMF cited Pakistan’s strong program implementation, even in the wake of devastating floods, as a key factor in maintaining macroeconomic stability and improving external and financing conditions. The Fund noted that fiscal performance has been robust, with a primary surplus of 1.3% of GDP achieved in FY25, and gross reserves rising to $14.5 billion at the end of the fiscal year, up from $9.4 billion a year earlier.

Policy priorities for Pakistan remain focused on maintaining macroeconomic stability, strengthening public finances, enhancing competition, and advancing reforms in state-owned enterprises (SOEs) and the energy sector. The IMF also emphasized the need to bolster the social safety net, develop human capital, and improve public service delivery.

The 37-month EFF, approved in September 2024, aims to entrench macroeconomic stability through sound policies, broaden the tax base, and rebuild international reserves. The 28-month RSF, approved in May 2025, supports Pakistan’s efforts to build resilience to natural disasters and climate risks, improve water resource management, and strengthen disaster response coordination.

Read more: IMF Set to Approve $1.2 Billion Financing for Pakistan

IMF Deputy Managing Director and Acting Chair Nigel Clarke praised Pakistan’s reform progress, noting that real GDP growth has accelerated, inflation expectations remain anchored, and fiscal and external imbalances have moderated. He urged the government to maintain prudent policies, accelerate tax reforms, and continue efforts to strengthen the financial sector and energy market.

Clarke also highlighted the importance of climate resilience, calling for further reforms to reduce Pakistan’s vulnerability to extreme weather events and improve the use of scarce water resources. The RSF arrangement, he said, is supporting these efforts by enhancing disaster response, integrating climate considerations into budgeting, and improving climate risk disclosure.