ISLAMABAD: The International Monetary Fund announced Thursday that it had approved the release of $1.05 billion for Pakistan, the fifth installment of a $6.6 billion loan to the nation.

The Washington-based lender granted an extended fund facility to Pakistan in September 2013 on the condition that it carry out extensive economic reforms especially in energy and taxation sectors.

The IMF said it had approved release of the new funds after a review of Pakistan's economic performance.

“Macroeconomic conditions are improving, but significant risks to the recovery remain,” IMF first deputy managing director David Lipton said in a statement.

“The measures taken by the authorities to address short-term macroeconomic vulnerabilities and implement structural reforms are bearing fruit, but continued efforts are needed to make the economic transformation more sustainable,” he said.

Plagued by a bloody homegrown Taliban insurgency, Pakistan is battling to get its shaky economy back on track and solve a chronic energy crisis that cripples industry.