Pakistan has received fresh financial backing after the International Monetary Fund approved the country’s latest loan review, unlocking new funds and keeping its multi-billion-dollar reform program firmly on track.
The executive board of the International Monetary Fund cleared the release of about $1.2 billion this week, offering critical support as Pakistan works to stabilise its economy, rebuild foreign exchange reserves and control inflation.
IMF releases fresh funds under ongoing program
The approval allows the disbursement of roughly $1 billion under Pakistan’s $7 billion Extended Fund Facility, along with an additional $200 million from the Resilience and Sustainability Facility. With this tranche, total IMF disbursements to Pakistan under both facilities have now reached approximately $3.3 billion.
The IMF said Pakistan must continue pursuing cautious economic policies to strengthen macroeconomic stability, while accelerating reforms aimed at building a stronger, private sector-driven economy.
Progress noted on inflation and reserves
The IMF decision follows a staff-level agreement reached in October, after the lender acknowledged progress in stabilising Pakistan’s economy. Officials pointed to easing inflation, improving foreign exchange reserves and a gradual recovery in investor confidence as signs of improvement.
Pakistan commits to fiscal reforms and tight monetary policy
Under the IMF program, the government has pledged to maintain a tight monetary stance, strengthen public finances and push forward with long-delayed structural reforms. These measures are also tied to broader efforts to improve the country’s ability to cope with climate-related disasters following this year’s devastating floods.
Privatisation drive moves forward under IMF framework
As part of the reform agenda, Pakistan is preparing to carry out its most significant state sell-off in nearly two decades. Prime Minister Shehbaz Sharif recently confirmed that bidding for a majority stake in Pakistan International Airlines will take place later this month, with four shortlisted groups cleared to compete.
IMF program remains central to economic stability
Pakistan’s economy, valued at roughly $370 billion, came under intense pressure last year after a balance-of-payments crisis pushed the rupee sharply lower and sent inflation to record levels. The IMF program has since played a central role in restoring a degree of economic stability and preventing further financial turmoil.
From Reuters
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