IMF clears $1.32 billion in fresh debt for Pakistan amid economic woes

To offset revenue shortfalls, the government increased petroleum levy rates as part of fiscal adjustments.

Pakistan’s finance minister pledged to maintain the fiscal path agreed before the West Asia conflict and to deliver a ₹3.4 trillion primary budget surplus; the new budget will be prepared in consultation with the IMF to ensure it is fiscally tight.

The IMF highlighted a more challenging external environment since the Middle East conflict, and urged Pakistan to maintain strong macroeconomic policies while accelerating reform efforts.

The Express Tribune reported the money would be disbursed early next week, bringing Pakistan's central bank reserves to over $17 billion.

The funds will be disbursed in two instalments: about $1.1 billion under the Extended Fund Facility and about $220 million under the Resilience and Sustainability Facility, bringing total disbursements under the two packages to about $4.8 billion.

The IMF board completed reviews of some agreements with Pakistan, clearing the way for about $1.32 billion in fresh funding immediately.

The State Bank of Pakistan increased its key policy rate by 100 basis points to 11.5%, marking its first hike in almost three years.

The IMF mission reviewed Pakistan's economic performance for the July–December 2025 period, including the third review of the $7 billion bailout package.

The IMF reached a staff-level agreement with Pakistan for a $7 billion bailout programme.

Pakistan made progress on structural reforms and met four governance benchmarks on time, including social support, gas-sector sustainability, and special technology zones.

Under the $1.2 billion climate facility, Pakistan adopted a green taxonomy and issued guidelines on climate-related financial risks management and on disclosure by listed companies.

The Federal Board of Revenue missed targets for net tax revenues and income tax revenues from retailers, though six of eight end-December 2025 indicative targets were met.

Pakistan met all end-December 2025 quantitative performance criteria and outperformed the floor on net international reserves, comfortably meeting the general government's primary balance target.