IMF approves $1.2 billion loan for Pakistan

Islamabad: A major development has come out of the International Monetary Fund (IMF) for Pakistan, where according to sources, the IMF has approved the release of a new tranche of one billion dollars. This amount will be released under the Extended Fund Facility (EFF) programme, while an additional $200 million has also been approved to deal with the effects of climate change.

Sources say that the IMF review mission recommended the release of a new tranche of the loan after a detailed review of Pakistan’s economic performance, fiscal reforms and economic targets. The review report also took into account the progress made in the government’s economic measures, tax reforms, financial discipline and foreign exchange reserves.

According to reports, a total of $3.3 billion has been released to Pakistan so far under the current programme, while the government hopes that the new tranche will improve foreign exchange reserves and reduce external payment pressures.

Pakistan had secured a 37-month Extended Fund Facility (EFF) programme with the IMF in September 2024, which aims to stabilise the economy, reduce the fiscal deficit and ensure implementation of the reform agenda. According to experts, this programme is being considered very important for Pakistan’s economy as the country is currently facing challenges such as external debt, inflation and current account pressures.

According to sources, the $200 million approved to combat climate change is of special importance for Pakistan, as the country has been facing severe floods, abnormal rainfall, heat waves and other climatic hazards in recent years. The government can spend this fund on projects to protect the environment, restore infrastructure and deal with natural disasters.

Economists say that the approval of the new tranche of the IMF will improve the confidence of global financial institutions and investors in Pakistan. This development is expected to not only reduce pressure on the rupee but also support Pakistan’s credit reputation in the global market.

Analysts said that if the government continues to effectively implement the IMF conditions and reform programme, the prospects for economic stability could become brighter in the coming months. However, they warned that public pressure on sensitive issues such as inflation, energy prices and tax reforms would remain a major challenge for the government.

On the other hand, government circles say that under the IMF programme, steps will continue to be taken to restore economic discipline, increase revenues and restore private sector confidence so that the economy can be built on sustainable foundations.