IMF Approves $1.3 Billion Loan for Pakistan
The International Monetary Fund has approved a $1.3 billion loan for Pakistan under a newly proposed 28-month climate resilience program. This package comes alongside the first review of Pakistan’s ongoing 37-month bailout program, which will now unlock a total of $2 billion in combined disbursements, including $1 billion from the previously agreed facility.
The loan is aimed at providing economic relief, supporting ongoing reforms, and helping Pakistan build resilience to climate-related financial risks. The funds will be available upon approval by the IMF’s Executive Board.
Macroeconomic Stability and Reform Efforts
Pakistan has made notable progress in stabilizing its economy over the past 18 months. Inflation has come down significantly, reaching some of its lowest levels in nearly a decade. Financial conditions have improved, with external balances also showing positive trends. Despite these improvements, the IMF warned of persistent risks such as global financial tightening, geopolitical tensions, and rising protectionist tendencies that could impact the country’s fragile recovery.
The IMF acknowledged Pakistan’s ongoing commitment to policy reforms, crediting authorities with restoring macroeconomic stability and regaining international confidence through difficult but necessary policy adjustments.
Challenges and Commitments Ahead
The Pakistani government has had to implement a series of politically sensitive reforms to qualify for IMF support. These have included higher taxation, reductions in subsidies, and steep hikes in energy and fuel prices—measures aimed at curbing fiscal deficits and restoring fiscal discipline.
The newly approved funding is expected to ease some of the financial strain and bolster public sector reforms. It also represents international confidence in Pakistan’s roadmap toward economic recovery. Moving forward, the government is expected to continue with structural reforms focused on strengthening fiscal resilience, expanding social protection, and improving long-term economic sustainability.
