IMF Approves $1B for Pakistan, Adds $1.4B Climate Loan
By Liam Hunter
The International Monetary Fund (IMF) has made a $1 billion disbursement to Pakistan after completing the first review for its $7 billion Extended Fund Facility (EFF) program.
The IMF also approved a new loan of $1.4 billion under its Resilience and Sustainability Facility (RSF) to help Pakistan build resilience to economic vulnerabilities of climate change and natural disasters.
The IMF praised Pakistan’s policy efforts under the EFF, stating that Pakistan demonstrated clear progress on stabilizing the economy and rebuilding confidence in a difficult global environment.
The IPA payment extends total payouts under the EFF to around $2.1 billion. Meanwhile, India’s objection to the IMF’s decision, based on concerns over possible misuse of the funds, led India to “abstain” from the vote.
Prime Minister Muhammad Shehbaz Sharif in Pakistan dismissed India’s allegations, stating that efforts to sabotage the IMF program have “failed.”
The IMF stated that both Conditional loan agreements were agreed to prior to the recent escalation of both countries.
Pakistan’s economy appears to have stabilized, with inflation reaching an unprecedented low of 0.3% in April. Gross reserves reached $10.3 billion at the end of April.
The IMF sees reserves rebounding in the medium term, attaining $13.9 billion by the end of June 2025.
The IMF’s assistance will be an important step in Pakistan’s pursuit of macroeconomic stability and sustainable growth.
