ISLAMABAD: The International Monetary Fund (IMF) has approved the release of $1.29 billion to Pakistan under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), urging Islamabad to continue strict monetary policies and push ahead with structural reforms.
The IMF called for expanding and simplifying the tax base, adjusting electricity and gas tariffs, and accelerating energy sector reforms to reduce circular debt and improve efficiency. It also stressed the need for state-owned enterprise reforms, privatisation, better governance, and an improved business environment.
The lender noted that despite recent floods, Pakistan has made progress in stabilising its economy, improving foreign reserves, and controlling inflation. The IMF also underscored the urgency of climate-related reforms, supported under the RSF, to enhance resilience against natural disasters.
Pakistan’s fiscal performance remained strong, with a primary surplus of 1.3% of GDP recorded in FY2025, in line with IMF targets. Foreign exchange reserves increased to $14.5 billion by the end of FY2025, reflecting improved external financing conditions and policy discipline.
The IMF also advised maintaining exchange rate flexibility and strengthening financial sector regulation to absorb external shocks. It emphasised that sustained reforms, alongside tight monetary policy, are essential to achieving stable, private sector-led growth amid a challenging global environment.
