The fund agreed in September 2024 to provide $7 billion over a period of 37 months under the Extended Fund Facility (EFF) while it decided to provide $1.4 billion under the Resilience and Sustainability Facility (RSF).
The executive board of the IMF agreed to provide Pakistan about $1 billion under the EFF and about $210 million under the RSF.
Pakistan has so far received a $4.5 billion loan from the IMF against two debt packages totaling $8.4 billion.
The Express Tribune newspaper reported that the money would be disbursed early next week, which will take the central bank’s reserves to over $17 billion.
However, the government had to stick to the old fiscal and monetary targets and gave a commitment to stay on the path of stabilisation despite strong voices against these policies that have caused higher unemployment, poverty, and income inequality.
The IMF approval came after the government showed better performance against fiscal and monetary targets, but there were divergent views about the path during the second half of this fiscal year.
The IMF mission had reviewed the performance of Pakistan’s economy for the July-December 2025 period, covering the third review of the $7 billion bailout package.
Pakistan met all end-December 2025 quantitative performance criteria and also outperformed against the floor on net international reserves and comfortably met the general government’s primary balance target.
The government also met six of eight end-of-December 2025 indicative targets, but the Federal Board of Revenue remained the weakest link. It missed the targets on net tax revenues collected by the FBR and income tax revenues from retailers, which fell short of IMF targets.
However, the government assured the IMF that it would remain focused on implementing revenue administration reforms to minimise the shortfall by the end of the fiscal year.
To offset the impact of the revenue shortfall on the IMF target, the government has increased petroleum levy rates.
The government also made some progress on structural reforms and met four structural benchmarks in the areas of governance, social support, gas sector sustainability, and special technology zones on time.
As part of the conditions under the $1.2 billion climate facility, the government adopted a green taxonomy and issued guidelines on the management of climate-related financial risks and on listed companies’ disclosure of climate-related risks and opportunities.
Finance Minister Muhammad Aurangzeb assured the IMF that the country remains committed to continuing with sound and prudent macroeconomic policies and structural and institutional reforms to place Pakistan on a path toward long-term sustainable and inclusive growth.
The fresh assurances have also been given to provide the foundation to withstand shocks, including the impact of the Middle East war.
Pakistan has now assured the IMF that it would not abandon the fiscal path agreed before the start of the Middle East war and would deliver the Rs 3.4 trillion primary budget surplus target.
According to another commitment, the new budget would be made in consultation with the IMF to ensure that it is a fiscally tight budget and that the government does not chase higher economic growth, according to the report.
