IMF Approves USD 1.32 Billion Loan Package for Pakistan

The International Monetary Fund (IMF) has approved fresh funding of about USD 1.32 billion for Pakistan after completing reviews of the country’s ongoing economic reform programmes, providing a major boost to its fragile economy amid regional uncertainty.

The IMF Executive Board cleared nearly USD 1.1 billion under the Extended Fund Facility (EFF) and around USD 220 million under the Resilience and Sustainability Facility (RSF) , taking Pakistan’s total disbursements under the two programmes to about USD 4.8 billion .

The latest tranche is expected to be released next week and could raise Pakistan’s foreign exchange reserves beyond USD 17 billion , according to local media reports.

The IMF said Pakistan had made “significant progress” in stabilising the economy despite a “highly uncertain external environment” following tensions linked to the Middle East conflict.

Pakistan met all major quantitative performance targets for the July-December 2025 review period and exceeded benchmarks for net international reserves and the primary budget surplus . However, the Federal Board of Revenue (FBR) missed tax collection targets, especially from retailers. To compensate, the government increased petroleum levy rates and pledged deeper revenue reforms.

The IMF also praised the State Bank of Pakistan for maintaining a tight monetary policy stance , including a recent 100 basis point rate hike to 11.5 per cent aimed at containing inflation.

Pakistan reportedly accepted nearly 50 reform conditions , including stricter taxation, energy-sector restructuring and tighter fiscal controls. The upcoming federal budget will also be prepared in consultation with the IMF to ensure continued fiscal discipline.

Finance Minister Muhammad Aurangzeb said the government remained committed to prudent macroeconomic policies and structural reforms despite criticism that IMF-backed austerity measures were worsening inflation, unemployment and poverty.