WASHINGTON (Web Desk) – The International Monetary Fund (IMF) Executive Board on Friday approved the latest review of Pakistan’s economic reform programme, paving the way for the release of $1.2 billion under ongoing financing arrangements.
Finance Minister Muhammad Aurangzeb confirmed the development in Islamabad, stating that the approval reflects Pakistan’s continued progress on difficult but necessary economic reforms.
The disbursement includes around $1 billion under the Extended Fund Facility (EFF) and approximately $200 million under the Resilience and Sustainability Facility (RSF). With this latest tranche, total disbursements under the programme have reached about $4.5 billion.
The IMF said Pakistan met key structural benchmarks, including tax policy reforms and energy pricing adjustments, aimed at strengthening fiscal discipline and improving macroeconomic stability.
Officials noted that the programme continues to focus on rebuilding foreign exchange reserves, controlling inflation, and maintaining fiscal discipline, particularly amid ongoing regional and global economic pressures.
Under the reform roadmap, Pakistan is expected to maintain a primary budget surplus of around 2% of GDP, broaden the tax base, and improve compliance in under-taxed sectors such as retail and agriculture. Additional revenue measures are also planned to gradually increase the tax-to-GDP ratio over the medium term.
Energy sector reforms remain a central pillar of the IMF programme, with commitments to regular tariff adjustments in electricity and gas to reduce circular debt and improve financial sustainability.
The programme also includes restructuring and privatisation of selected state-owned enterprises, aimed at reducing fiscal burden and enhancing efficiency in the public sector.
Officials said the latest tranche is expected to strengthen Pakistan’s external position, with inflows likely to boost foreign exchange reserves in the coming weeks.
The IMF also emphasized the importance of maintaining a tight, data-driven monetary policy to anchor inflation expectations and ensure macroeconomic stability.
An IMF mission is scheduled to visit Islamabad on May 15 to discuss the upcoming federal budget and review progress on structural reforms.
Pakistan is currently under a $7 billion, 37-month IMF programme, designed to stabilise the economy through fiscal discipline, structural reforms, and measures to support long-term growth.
