ISLAMABAD: The International Monetary Fund has praised the fiscal performance of Pakistan in the ongoing fiscal year. The board of the IMF appreciated Pakistan’s economic progress and fiscal stability.
The IMF executive board met on Tuesday and approved $2.3 billion dollars next tranche for Pakistan. The Board completed the second review of the Extended Fund Facility and the first review of the Resilience and Sustainability Facility. The decision cleared an immediate disbursement of about $1.2 billion. The IMF released $1 billion under the EFF and another $200 million under the RSF. Total disbursements under both programs have now reached $3.3 billion.
IMF Reviews Mark Progress in Economic Stability
Pakistan’s 37-month EFF began on September 25, 2024. The program aims to strengthen economic resilience and support sustainable growth. It focuses on macroeconomic stability, reserve building, and tax base expansion. It also seeks stronger competition, higher productivity, and improved public services. The government is also reforming state-owned enterprises and restoring the energy sector’s viability.
Pakistan has made steady progress under the EFF. Fiscal performance remained strong during FY25. The government achieved a primary surplus of 1.3 percent of GDP. Inflation increased following heavy floods, but officials expect the rise to be temporary. Gross reserves reached $14.5 billion by the end of FY25. Reserves had stood at $9.4 billion one year earlier. The IMF expects reserves to rise further in FY26.
RSF Supports Climate Resilience
The IMF approved Pakistan’s 28-month RSF in May 2025. The program supports policy efforts to reduce climate vulnerabilities. It aims to improve disaster resilience and strengthen public investment processes. It also promotes efficient water use and stronger federal-provincial coordination during emergencies. Moreover, it focuses on climate risk disclosure by banks and corporates. The RSF also helps Pakistan pursue mitigation goals and reduce macro-critical climate risks.
Strong Endorsement from the IMF
IMF Deputy Managing Director Nigel Clarke praised Pakistan’s reform progress. He noted that policy implementation preserved stability during major shocks. He urged Pakistan to maintain prudent policies to secure durable growth. He also stressed the importance of tax reforms, tight monetary policy and deeper financial markets. Clarke said Pakistan must advance energy reforms to address inefficiencies and reduce costs.
Clarke said that better governance, SOE oversight and improved economic performance are essential for overall growth in Pakistan.
