The IMF Executive Board has approved a $1.29 billion loan for Pakistan, according to Geo News. The approval follows a staff-level agreement reached in October under Pakistan’s ongoing loan programmes. Officials said the decision covers tranches from both the Extended Fund Facility and the Rapid Financing Instrument.
Pakistan Set to Receive New Funds
Under the $7 billion Extended Fund Facility, Pakistan will receive more than $1 billion. This includes the first tranche of over $200 million under the $1.3 billion Rapid Financing Instrument. With the new disbursements, total releases under the two programmes will reach $3.3 billion. Pakistan had already received two instalments under the EFF. The IMF Board also approved the second economic review.
IMF Praises Programme Implementation
The IMF described Pakistan’s programme implementation as strong. It assured continued support for the government’s economic reforms. Officials expect the latest disbursement to strengthen Pakistan’s foreign exchange reserves. An IMF team led by Iva Petrova held discussions in Karachi, Islamabad and Washington to finalise the agreement.
Reform Priorities Identified
The IMF highlighted key priorities for Pakistan. These include sustaining fiscal discipline while supporting flood-affected households. It also stressed maintaining inflation within the State Bank’s target range and restoring viability in the energy sector. The Fund urged progress on structural reforms. It also cited advances on the RSF-backed climate agenda, saying recent floods show the need for long-term climate resilience.
IMF Issues Governance Warning
Ahead of the Board meeting, the IMF released its Governance and Corruption Diagnostic report. The report warned that corruption and weak institutions continue to hinder Pakistan’s economic development. It noted persistent bribery, weak oversight, and reduced trust in public institutions. It said funds lost to corruption could support essential services and broader development.
