• Total disbursements under current programme rise to around $4.5bn
• Fund cites progress on tax reforms and energy pricing adjustments

WASHINGTON: The Executive Board of International Monetary Fund (IMF) on Friday approved the latest review of Pakistan’s ongoing reform programme, clearing the way for the release of about $1.2 billion in financing under its existing arrangements.

The approval followed a board meeting in Washington and reflects the Fund’s assessment that Pakistan has made progress under its stabilisation and reform agenda, while still facing significant macroeconomic challenges.

The disbursement includes roughly $1 billion under the Extended Fund Facility (EFF) and about $210 million under the Resilience and Sustainability Facility (RSF). With this tranche, total disbursements under the current programme rise to approximately $4.5 billion.

Pakistan’s 37-month EFF arra­ngement, approved in September 2024, is part of a broader $7bn stabilisation package aimed at supporting macroeconomic stability, rebuilding foreign exchange reserves, and advancing structural reforms. The RSF complements the programme with a focus on climate resilience and long-term sustainability.

According to the IMF, Pakistan has met key structural benchmarks under the review, including measures related to tax policy and energy pricing adjustments. These steps are intended to strengthen fiscal discipline and improve macroeconomic management.

The programme continues to prioritise fiscal consolidation, including efforts to maintain a primary surplus target of around two per cent of GDP, broaden the tax base, and improve compliance in under-taxed sectors such as retail and agriculture.

Energy sector reforms remain central, with commitments to regular tariff adjustments in electricity and gas aimed at reducing circular debt and improving financial viability. The programme also includes plans to continue restructuring selected state-owned enterprises to reduce fiscal pressures and improve efficiency.

The IMF said the latest approval would help support Pakistan’s external position, with expected inflows contributing to a gradual strengthening of foreign exchange reserves. At the same time, the Fund is expected to maintain its emphasis on a tight and data-driven monetary policy stance to help anchor inflation expectations.

An IMF mission is scheduled to visit Islamabad on May 15 to review progress on structural reforms and begin discussions on the next federal budget framework.

Analysts say the approval provides short-term stability for financial markets, while underscoring that sustained reform implementation will remain critical for long-term fiscal and external sustainability.

Published in Dawn, May 9th, 2026