ISLAMABAD: Pakistan has received $1.2 billion from the International Monetary Fund (IMF) following approval by the IMF Executive Board, the State Bank of Pakistan (SBP) announced on Thursday. The funds, disbursed under the Extended Fund Facility (EFF) and the climate-focused Resilience and Sustainability Facility (RSF), will be reflected in SBP’s foreign exchange reserves for the week ending December 12, 2025.
The approval, finalized during a December 8 meeting, came after the IMF completed the second review of Pakistan’s economic reform program under the EFF and the first review under the RSF.
Deputy Managing Director and Acting Chair Nigel Clarke noted that Pakistan’s reforms under the EFF had “helped preserve macroeconomic stability despite several recent shocks.” He added that real GDP growth had accelerated, inflation expectations remained anchored, and fiscal and external imbalances continued to ease. Clarke emphasized the importance of maintaining prudent policies, advancing structural reforms, and fostering private-sector-led sustainable growth.
Clarke further highlighted the authorities’ commitment to the FY2026 primary balance target, even while addressing urgent relief needs following severe floods. He stressed that reforms to simplify tax policy and broaden the tax base are crucial for fiscal sustainability and for boosting climate resilience, social protection, human capital development, and public investment.
On monetary policy, Clarke said that a “tight stance” had helped reduce inflation and should continue to keep it within the SBP’s target range. He also encouraged improvements in central bank communication, deepening the interbank foreign exchange market, and allowing exchange rate flexibility to absorb shocks. The IMF statement also underscored the need for strong financial regulation, capital market development, and further structural reforms, including governance reforms, SOE privatization, and improvements in economic data and statistics, to unlock growth potential and attract private investment.
Prime Minister Shehbaz Sharif welcomed the IMF decision, saying it reflects Pakistan’s progress in implementing measures essential for economic stability and growth. He praised Finance Minister Muhammad Aurangzeb and his team for the effective execution of economic reforms recognized by the IMF.
