Pakistan receives $1.2bn as IMF releases EFF, climate-finance funds

SBP also receives additional $200 million under Resilience and Sustainability Fund

The International Monetary Fund (IMF) has released a $1.2 billion tranche to Pakistan, confirmed by the State Bank of Pakistan. According to State Bank of Pakistan officials, $1 billion of the amount was disbursed under the Extended Fund Facility (EFF) program, while the IMF released an additional $200 million under climate financing through the Resilience and Sustainability Facility (RSF).

The IMF’s Executive Board approved the release of the $1.2 billion tranche for Pakistan on Monday. The funds are being provided under the EFF and RSF programs, bringing the total disbursements under these programs to $3.3 billion.

According to the decision that would keep the two loan programmes worth $8.4 billion on track.

The IMF noted that Pakistan has made significant progress on reform measures under the EFF, maintaining economic stability despite a challenging global environment and recent devastating floods.

Financial performance remained strong, with a primary surplus of 1.3% recorded for FY2025, in line with targets. While inflation increased, the IMF described it as temporary, due to disruptions in the food supply.

Read: IMF approves $1.3b loan for Pakistan

Foreign exchange reserves have risen to $14.5 billion, showing a significant improvement compared to the previous year, with further increases expected in the coming fiscal year.

After the Executive Board meeting, IMF Deputy Managing Director Nigel Clarke stated that Pakistan’s economic reforms have played a key role in maintaining macroeconomic stability under difficult conditions.

He highlighted positive signs, including improved economic growth, lower inflation expectations, and reduced fiscal and external deficits. However, he stressed that, given global uncertainties, Pakistan needs to accelerate reforms with cautious policies to ensure sustainable, private-sector-led growth.

To secure the IMF board meeting date, the Pakistani authorities had agreed to fulfill two prior actions – a guarantee to issue an order to restructure an undercapitalised bank and the publication of the Governance and Corruption Diagnostic Assessment report – the latter costing the government political capital.

The $1.1 billion is the third tranche under the $7 billion economic stabilisation package, approved based on Pakistan’s economic performance for the January–June period of the last fiscal year.

But to pave the path for approval and continuation of the programme, the board accepted Pakistan’s request for waivers on missing some conditions for the end-June period and also relaxed at least three conditions for the next review.