Pakistan received a major financial boost after the International Monetary Fund (IMF) approved its latest program review, clearing the release of $1.2 billion in combined funding. The approval marks another important step in stabilising Pakistan’s economy, supporting its reserves, and continuing key economic reforms.
The IMF board confirmed the decision on Monday, keeping Pakistan’s ongoing loan program on schedule and reinforcing confidence in the country’s economic direction.
Key Highlights (Perfect for Featured Snippet)
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IMF releases $1.2 billion in new financing
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Includes $1 billion under the Extended Fund Facility (EFF)
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Includes $200 million under the Resilience and Sustainability Facility (RSF)
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Total disbursements under both programs now reach $3.3 billion
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IMF praises Pakistan for strong reform progress despite recent floods
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Fund calls for continued fiscal discipline and faster structural reforms
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Pakistan pushes forward with major privatisation efforts, including PIA
What This IMF Approval Means for Pakistan
The fresh disbursement comes at a crucial time as Pakistan works to rebuild its foreign exchange reserves, reduce inflationary pressures, and strengthen market confidence.
According to the IMF, Pakistan showed credible progress on its reform commitments, even while dealing with economic shocks and devastating climate impacts earlier in the year.
The IMF board noted improvements in:
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Inflation trends
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Investor sentiment
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Foreign exchange reserves
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Overall economic stabilization
The government has pledged to convert this temporary stability into long-term economic resilience.
Government Reaction: “Pakistan Has Avoided Default”
Prime Minister Shehbaz Sharif’s office welcomed the IMF approval, describing it as recognition of Pakistan’s “effective and disciplined reform efforts.”
The government stated that:
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Pakistan successfully avoided a sovereign default
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The country must now shift focus from stabilisation to sustainable growth
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Economic opportunities must be expanded to benefit ordinary citizens
IMF Calls for Stronger Reforms
While acknowledging progress, the IMF emphasized several urgent priorities for Pakistan, including:
1. Strengthening Public Finances
Pakistan must continue increasing revenue and controlling expenditures to reduce fiscal vulnerabilities.
2. Restoring the Energy Sector’s Viability
Persistent energy losses, circular debt, and inefficiencies remain a major risk to economic stability.
3. Accelerating Structural Reforms
The IMF highlighted the need for productivity-boosting reforms that support private-sector-led growth.
4. Improving Climate Resilience
Under the RSF financing, Pakistan is required to adopt climate-focused measures such as:
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Better water pricing
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Stronger disaster-response protocols
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Improved climate-risk reporting across banks and companies
Deputy Managing Director Nigel Clarke noted that Pakistan must maintain “prudent and consistent policies” to ensure medium-term growth.
Privatisation Moves Ahead — PIA Sale Scheduled
As part of its commitments, Pakistan is moving forward with its most significant privatisation effort in almost 20 years.
The government has confirmed that bidding for a majority stake in Pakistan International Airlines (PIA) will take place on December 23.
Four shortlisted investor groups have already been cleared to participate in the process.
Why This Approval Matters
Pakistan’s economy, valued at around $370 billion, has faced severe challenges over the past two years — from a balance-of-payments crisis to record inflation and currency depreciation.
The IMF program has been central to restoring short-term stability and ensuring external financing remains available.
Each IMF review acts as a checkpoint. Once approved, it triggers the release of loan tranches that help the country meet its obligations and maintain liquidity.
Final Outlook
With the latest $1.2 billion disbursement secured, Pakistan now has breathing room to push forward with reforms in energy, taxation, climate resilience, and governance.
However, experts believe that consistent policy implementation, rather than short-term financing, will determine whether Pakistan can achieve long-term financial stability.
