The Executive Board of the International Monetary Fund (IMF) completed the first review of Pakistan’s economic reform programme supported by the Extended Fund Facility (EFF) Arrangement. This decision allows for an immediate disbursement of around $1 billion (SDR 760 million), bringing total disbursements under the arrangement to about $2.1 billion (SDR 1.52 billion).

Additionally, the IMF Executive Board approved Pakistan’s request for an arrangement under the Resilience and Sustainability Facility (RSF), granting access to about US$1.4 billion (SDR 1 billion).

Pakistan’s 37-month EFF, initiated on September 25, 2024, aims to build resilience and support sustainable growth. Key priorities include ensuring macroeconomic sustainability through sound policies, enhancing competition and productivity, reforming state-owned enterprises, and building climate resilience. The programme has already shown significant progress with a primary surplus of 2.0pc of GDP achieved in the first half of FY25, and inflation reaching a historic low of 0.3pc in April.

The RSF will aid Pakistan in reducing vulnerabilities to natural disasters and strengthening economic resilience. Measures include improving public investment processes, efficient water resource management, and enhancing the information architecture for climate-related risks. These efforts align with Pakistan’s commitments to international mitigation targets and reducing macro-critical risks.

Following the Executive Board discussion, Nigel Clarke, Deputy Managing Director and Chair, stated: ‘Pakistan has made important progress in restoring macroeconomic stability despite a challenging environment. The steady implementation of fiscal reforms and monetary policies has been pivotal in achieving these gains.’ He emphasised the need for continued reform acceleration to safeguard macroeconomic stability and enhance private sector-led growth.

With gross reserves projected to reach $13.9 billion by end-June 2025, the IMF’s support is seen as a crucial step in strengthening Pakistan’s economic framework and resilience in the face of global and domestic challenges.