New York (Web Desk): The International Monetary Fund (IMF) has approved the release of a $1.2 billion tranche for Pakistan, a decision expected to further reinforce the country’s path toward economic stability.
The IMF Executive Board acknowledged that Pakistan remained firmly committed to the programme despite the severe floods it faced in recent years, noting that the country’s overall economic direction had stayed on track.
According to the IMF’s statement, Pakistan managed to withstand external pressures even in the aftermath of the devastating floods and implemented critical economic reforms on time.
These measures, the Fund said, helped strengthen productivity and improve competitiveness. The statement also highlighted that Pakistan successfully met the objectives of the climate-related Resilience and Sustainability Facility (RSF) programme.
Pakistan entered a 37-month loan arrangement with the IMF in September 2024, under which a series of reforms were carried out to restore macroeconomic stability. As a result, the country saw an improvement in foreign exchange reserves, a rise in tax revenue, and a higher tax-to-GDP contribution.
IMF Deputy Director Nigel Chalk noted that Pakistan achieved its primary balance target despite flood-related challenges and continued to advance fiscal reforms.
He said that the country's tight monetary policy played a significant role in containing inflation and easing price pressures.
The IMF further emphasized that Pakistan must accelerate reforms in the energy sector, particularly to curb rising electricity costs and tackle the mounting circular debt. It added that cost-escalating factors in the gas sector also need to be brought under control.
Chalk recommended that Pakistan step up structural reforms to boost investment, move faster on privatization, and strengthen the mechanisms through which economic data is gathered and reported.