IMF approves $1b loan tranche for Pakistan amid economic reforms
Business
Tranche was greenlit following Pakistan’s successful completion of key performance benchmarks
WASHINGTON (Dunya News) – The Executive Board of the International Monetary Fund (IMF) has formally approved a $1 billion disbursement for Pakistan under the Extended Fund Facility (EFF), marking a significant step in the country’s ongoing economic stabilisation efforts.
As per official sources, the tranche was greenlit following Pakistan’s successful completion of key performance benchmarks. The EFF program, which is designed to support countries facing balance-of-payment difficulties, spans a 37-month period.
Additionally, Pakistan is also a participant in the Resilience and Sustainability Facility (RSF), which is aimed at enhancing climate resilience and spans 28 months. However, the current disbursement only pertains to the EFF.
This immediate release of funds is expected to provide crucial support to Pakistan's foreign exchange reserves, ease fiscal pressure, and help maintain economic momentum amid ongoing global financial uncertainty.
The IMF’s decision comes after Pakistan fulfilled major structural benchmarks, including improvements in the tax-to-GDP ratio, maintaining a primary fiscal surplus, and achieving provincial fiscal targets.
Economic analysts have lauded the development, noting that this financial injection is vital for Pakistan’s economic stability and investor confidence. They emphasized that it will not only ease short-term fiscal challenges but also bolster Pakistan’s credibility in the eyes of international lenders.
In a geopolitical twist, reports suggest that India attempted to obstruct the approval process. However, the move failed, and in response, India allegedly withdrew its representative from the IMF Executive Board.
Looking ahead, an IMF delegation is scheduled to visit Pakistan from May 14 to May 22. The team will work closely with Pakistani authorities in finalizing the upcoming federal budget and ensuring alignment with the IMF’s fiscal discipline and reform agenda.
