The International Monetary Fund (IMF) has approved the release of $1.2 billion for Pakistan under its ongoing support program, as Islamabad seeks to shore up foreign exchange reserves and manage mounting energy-sector pressures amid lingering disruptions linked to conflicts in the Middle East.
The approval was granted by the IMF Executive Board following the successful completion of Pakistan’s latest program review, officials said on Friday.
The disbursement includes roughly $1 billion under the Extended Fund Facility (EFF) and around $200 million through the Resilience and Sustainability Facility (RSF), taking Pakistan’s total receipts under the current IMF arrangement to approximately $4.5 billion.
Finance Minister Muhammad Aurangzeb welcomed the decision, saying it reflected growing international confidence in Pakistan’s reform trajectory and macroeconomic stabilisation efforts.
Pakistan is currently implementing a 37-month, $7 billion IMF programme approved in September 2024 to address structural weaknesses, restore fiscal stability and rebuild investor confidence after years of economic turbulence.
The IMF said Pakistan had met key reform benchmarks, including measures related to taxation, energy pricing and fiscal management aimed at strengthening economic resilience.
The latest inflow is expected to support Pakistan’s external account position and help stabilise reserves at a time when higher energy import costs and regional geopolitical uncertainty continue to weigh on the economy.
Energy sector reforms remain a central component of the IMF-backed program, with authorities committed to reducing circular debt through periodic electricity and gas tariff adjustments and broader governance reforms.
The program also requires Pakistan to maintain fiscal discipline, broaden the tax base and sustain tight monetary policies to contain inflationary pressures.
An IMF mission is expected to visit Islamabad later this month for discussions on the upcoming federal budget and further progress on structural reforms.
Analysts say the latest approval is likely to provide short-term relief to financial markets while reinforcing Pakistan’s access to external financing amid a challenging global economic environment.
Muhammad Luqman is Associate Editor at Views News Now. He writes on wide-ranging issues including economy, South Asia, the Middle East, agriculture, economy and innovation. Luqman has worked some of the leading news organizations and won acclaim for his original and research-based works.
