The International Monetary Fund (IMF) on Tuesday approved a $1.2 billion disbursement for Pakistan following the completion of the second review of its reform agenda under the Extended Fund Facility (EFF) and the first review of its Resilience and Sustainability Facility (RSF), the global lender announced.
The IMF will release $1bn under the EFF and $200 million under the RSF, bringing total disbursements under both programmes to $3.3 bn.
"Today, the Executive Board of the IMF completed the second review of Pakistan’s economic reform program supported by the EFF and the first review of Pakistan’s program supported by the RSF. This decision allows for an immediate disbursement of around US$1 billion (SDR 760 million) under the EFF and around US$200 million (SDR 154 million) under the RSF, bringing total disbursements under the two arrangements to about $3.3 billion (SDR 2,434 billion)," the IMF said in its official statement.
The global lender added, "Pakistan’s policy efforts under the EFF have delivered significant progress in stabilizing the economy and rebuilding confidence amid a challenging global environment and recent severe floods."
"Fiscal performance has been strong, with a primary surplus of 1.3 percent of GDP achieved in FY25, in line with targets. Inflation has increased, reflecting the impact of the floods on food prices, but this is expected to be temporary. Gross reserves stood at $14.5 billion at end-FY25, up from $9.4 billion a year earlier, and are projected to continue to be rebuilt in FY26 and over the medium term."
The release of $1.2bn is expected to further bolster Pakistan's foreign exchange reserves.
Pakistan and the IMF had reached a staff-level agreement on the second review of the 37-month EFF arrangement and the first review of the 28-month RSF arrangement by mid-October 2025.
The approval follows a staff-level agreement reached in October between Pakistan and the IMF on the country's ongoing loan programmes.
The IMF has described the implementation of the ongoing loan programmes as "strong" and has assured the government of continued support for its economic reforms.
The release of $1.2bn is expected to further bolster Pakistan's foreign exchange reserves.
An IMF team, led by Iva Petrova, held discussions in Karachi and Islamabad from September 24 to October 8 and in Washington, DC, to finalise the SLA.
The IMF cited robust programme implementation and highlighted priorities, including sustaining fiscal discipline while supporting flood-affected households, maintaining inflation within the State Bank of Pakistan’s target range, restoring energy sector viability and advancing structural reforms.
The Fund had also noted progress on the RSF-backed climate agenda, emphasising that recent floods underscore the need for consistent, comprehensive reforms to mitigate climate risks.
Ahead of the Board meeting, the lender released its Governance and Corruption Diagnostic (GCD) report. The report has warned that persistent corruption and weak institutions continue to undermine the country’s economic development even as it stabilises under an EFF.
"Corruption is a persistent challenge in Pakistan, with significant adverse implications for economic development," the report noted. It says indicators reflect weak control of corruption over time, with negative consequences for the effectiveness of public spending, revenue collection and trust in the legal system.
The report mentioned that Pakistanis are often compelled to make continuous payments to officials to obtain basic services, while funds lost to corruption could otherwise support higher production and development.
The report read that political and economic elites have obstructed economic development by seizing control of policies and capturing public benefits for their own gain.
Separately, Prime Minister Shehbaz Sharif said that the IMF financial announcement highlights Pakistan's progress in implementing the measures necessary for economic stability and growth.
In a statement, he added that the IMF's acknowledgment of the effective execution of economic reforms and initiatives in Pakistan is a clear recognition of the hard work of Finance Minister Muhammad Aurangzeb and his team.
The prime minister also praised Chief of Defence Forces Field Marshal Syed Asim Munir for his significant role in supporting the implementation of the reform agenda and facilitating Pakistan’s path toward economic development.
PM Shehbaz noted that steering the country from the brink of default toward stability and growth was a challenging period that required collective sacrifice. He highlighted that political parties set aside partisan interests, and the nation endured economic hardships to achieve what once seemed impossible.
He expressed satisfaction that Pakistan’s economic reforms and digitization efforts have become a successful case study and a model for the world.
The prime minister voiced confidence that the vision of Pakistan’s economic development will soon be realized. While stability has been achieved, he emphasised that continued efforts are necessary to propel the economy toward sustained growth.
PM Shehbaz reaffirmed his commitment to working tirelessly for the prosperity of the people and for liberating the country from foreign debt. He expressed optimism that the day is not far when Pakistan will attain economic self-sufficiency.
