Fund highlights strong policy implementation and stability
WASHINGTON: The International Monetary Fund has praised Pakistan’s economic management, saying consistent policy implementation has helped preserve stability and improve financing conditions despite growing uncertainty caused by the Middle East conflict.
The IMF Executive Board released its assessment on Friday after completing the third review of Pakistan’s programme under the Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF).
Earlier, the State Bank of Pakistan confirmed receiving nearly $1.32 billion after IMF approval of $1.1 billion under the EFF and around $220 million through the RSF programme.
According to the IMF, Pakistan has made “significant progress” in stabilising the economy, rebuilding investor confidence, and strengthening external financial buffers despite global economic pressures.
Furthermore, the Fund projected that Pakistan would achieve a primary fiscal surplus of 1.6 percent of GDP during FY26, in line with programme targets. It also noted that inflation rose due to higher global commodity and energy prices.
The IMF added that foreign exchange reserves improved beyond earlier estimates, reaching approximately $16 billion by December compared to $14.5 billion earlier in the fiscal year.
IMF warns of risks linked to Middle East conflict
However, the IMF cautioned that the ongoing Middle East conflict could increase economic uncertainty, raise inflationary pressures, and affect Pakistan’s growth and balance of payments outlook.
The lender urged authorities to maintain fiscal discipline, continue structural reforms, and preserve exchange rate flexibility to absorb external shocks effectively.
Additionally, the IMF stressed the importance of reforms in state-owned enterprises, governance, and investment policies to support long-term economic growth and resilience.
Deputy Managing Director Nigel Clarke said strong programme implementation remained essential for sustaining financial stability and inclusive economic growth.
