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Aftab Maken
ISLAMABAD: The International Monetary Fund (IMF) Executive Board has completed the second review of Pakistan’s 37-month Extended Fund Facility (EFF) arrangement and the first review under the 28-month Resilience and Sustainability Facility (RSF).
This approval enables an immediate disbursement of approximately $1 billion under the EFF and $200 million under the RSF, bringing total payouts under both programs to about $3.3 billion.Despite the devastating floods earlier this year, Pakistan’s authorities have demonstrated robust program implementation, maintaining macroeconomic stability and improving external financing conditions.
Fiscal performance remained strong, with a primary surplus of 1.3% of GDP achieved in FY2025, while gross reserves rose to $14.5 billion from $9.4 billion a year earlier.https://artifacts.grokusercontent.com/third-party-image
The EFF, approved in September 2024, focuses on entrenching stability through sound policies, rebuilding reserves, broadening the tax base, enhancing competition, reforming state-owned enterprises (SOEs), and restoring energy sector viability.
The RSF, approved in May 2025, supports efforts to build resilience against natural disasters, improve water resource management, strengthen disaster response coordination, and enhance disclosure of climate-related financial risks.
In a statement following the Board discussion, IMF Deputy Managing Director Nigel Clarke praised Pakistan’s reform efforts: “Pakistan’s reform implementation under the EFF has helped preserve macroeconomic stability in the face of several recent shocks.
Real GDP growth has accelerated, inflation expectations have remained anchored, and fiscal and external imbalances have continued to moderate.”Clarke emphasized the need for continued prudent policies, including a tight monetary stance to anchor inflation, energy sector reforms to reduce costs and circular debt, SOE privatization, and accelerated governance improvements. He also highlighted the urgency of climate reforms, noting that recent floods underscore Pakistan’s vulnerability to extreme weather events.
The IMF stressed that ongoing structural reforms are essential for unlocking private sector-led growth, attracting investment, and ensuring sustainable medium-term prosperity. Pakistan’s reserves are projected to rebuild further in FY2026, supported by these measures.
