Pakistan secures $1.2 billion IMF deal under extended, resilience facilities

ISLAMABAD (Mudasir Ali Rana) – Pakistan and the International Monetary Fund (IMF) have reached an agreement following the review of the loan program, under which Pakistan will receive $1.2 billion.

According to the IMF’s official statement, Pakistan will receive approximately $1 billion under the Extended Fund Facility (EFF) and an additional $200 million under the Resilience and Sustainability Facility (RSF).

The statement noted that Pakistan has successfully achieved its social sector targets, while increasing funds for the Benazir Income Support Programme (BISP) as part of efforts to reduce poverty.

The IMF commended the federal and provincial governments for their performance in education, health, and economic reforms, adding that Pakistan’s fiscal deficit is now at its best level in 14 years.

The global lender acknowledged that Pakistan has accelerated implementation of tax reforms and policy actions, emphasizing greater cooperation between the federation and provinces to expand the tax net and increase revenue.

The statement further said that Pakistan is taking measures to keep inflation within the 5–7 percent range and to stabilize foreign exchange reserves, while the State Bank remains committed to maintaining a tight monetary policy.

On the energy sector, the IMF stressed that Pakistan must meet targets to reduce circular debt, curb electricity losses, and improve the performance of distribution companies.

The IMF also urged Pakistan to adopt a new tariff policy to reduce government intervention in agriculture, boost production, and promote global trade.

Additionally, the statement emphasized accelerating climate action, improving water resource management, and continuing energy reforms. The IMF mission expressed deep sympathy over the losses caused by floods in Pakistan and thanked the government for its hospitality.