The International Monetary Fund (IMF) Executive Board has approved a $1 billion disbursement to Pakistan under the Extended Fund Facility (EFF), marking a key milestone in the country’s economic stabilization program.
The approval follows Pakistan’s successful fulfillment of critical performance benchmarks, including a higher tax-to-GDP ratio, a primary fiscal surplus, and adherence to provincial fiscal targets. The EFF spans 37 months and supports countries facing balance-of-payment challenges.
While Pakistan is also enrolled in the 28-month Resilience and Sustainability Facility (RSF) focused on climate resilience, this tranche pertains solely to the EFF.
This financial boost is expected to shore up Pakistan’s foreign reserves, reduce fiscal strain, and maintain economic momentum amid global uncertainty. Economists have welcomed the move, calling it essential for Pakistan’s financial credibility and investor confidence.
Notably, diplomatic sources claim India attempted to obstruct the approval, allegedly withdrawing its IMF Executive Board representative when the move failed.
An IMF team is set to visit Pakistan from May 14 to 22 to collaborate on the upcoming federal budget and ensure it aligns with the IMF’s reform agenda.
