• Board huddle follows staff-level deal in October
• Approval expected to boost investor confidence
• Islamabad under pressure to maintain fiscal discipline

WASHINGTON: The International Monetary Fund’s (IMF) Executive Board will tomorrow (Dec 8) take up Pakistan’s loan reviews, a step expected to clear the way for about $1.2 billion in new financing at a critical moment for the economy.

The IMF confirmed the date of the meeting in a brief announcement on Friday. The session, listed on the Fund’s official board calendar, will consider Pakistan’s performance under its Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programmes. If approved, the reviews would unlock roughly $1bn under the EFF and $200 million under the RSF.

The board meeting follows a staff-level agreement reached in October after extensive talks in Karachi, Islamabad and Washington from Sept 24 to Oct 8. While the staff mission signed off on Pakistan’s progress, the disbursement still hinges on formal board approval.

Negotiations between Islamabad and the lending agency, led by IMF mission chief Iva Petrova, had focused on Pakistan’s fiscal performance, monetary stance, structural reforms and progress on climate-related commitments.

In its earlier assessment, the IMF noted that Pakistan had made “strong progress” in fiscal consolidation, reducing inflation and strengthening external buffers. It also acknowledged the State Bank of Pakistan’s (SBP) continued tight monetary policy, which has played a key role in anchoring inflation expectations.

Structural reforms — especially those related to state-owned enterprises, energy-sector viability, competition and public-service delivery — were cited as areas where the authorities had demonstrated continued commitment.

The Fund also pointed to advances under the RSF-supported climate agenda, including efforts to enhance resilience to natural disasters, strengthen water-resource management and improve the country’s climate information systems.

These reforms have taken on greater urgency following recent floods that caused widespread damage to agriculture, infrastructure and livelihoods.

Approval of the reviews is widely expected to bolster investor confidence at a critical moment, as Pakistan continues to stabilise its economy amid external pressures and the lingering effects of flood damage.

Islamabad has been under sustained pressure to maintain fiscal discipline, accelerate energy-sector reforms and continue revenue-mobilisation measures to ensure longer-term stability.

The IMF has warned, however, that risks remain elevated. The economic outlook has been tempered by flood-related losses, and the Fund has emphasised that monetary policy must remain “appropriately tight and data-dependent” to keep inflation within the SBP’s target range.

It has also stressed the need for steady implementation of reforms to strengthen competition, enhance productivity, improve public services and reduce persistent vulnerabilities in the energy sector.

If the IMF board grants its approval tomorrow, Pakistan could receive the disbursement as early as the following day. Officials in Islamabad hope the inflow will reinforce external buffers, support economic recovery and signal continued international confidence in the government’s reform agenda.

Key report released

Earlier, the IMF had released its long-awaited Governance and Corruption Diagnostic Assessment (GCDA), in which it highlighted persistent corruption challenges in Pakistan driven by systemic weaknesses across state institutions and demanded immediate initiation of a 15-point reform agenda to improve transparency, fairness and integrity.

The report, publication of which is a precondition for the IMF executive board’s approval of the loan programmes, estimated that Pakistan could boost economic growth by about 5 to 6.5 per cent over five years if it implements a package of governance reforms beginning within the next three to six months.

The report led to criticism of the government and opposition parties ca­­lled for a probe into the “worst financial scandal of Pakistan’s history”.

However, Finance Minister Muhammad Aurangzeb stated last week that the report was “not criticism” but a “catalyst for accelerating long-overdue reforms”. He maintained that the report acknowledged significant progress in sectors including taxation and governance, and that many of its priority recommendations were “already work in progress”.

The finance minister further said the government was committed to implementing the remaining recommendations as part of broader institutional reforms essential to sustaining Pakistan’s economic turnaround.

Published in Dawn, December 7th, 2025