IMF Executive Board Approves $1.2 Billion Financing for Pakistan Reform Program

The IMF Executive Board approved Pakistan's latest reform programme review on May 8, 2026, releasing $1.2 billion in financing ($1 billion under Extended Fund Facility, $200 million under Resilience and Sustainability Facility). Total disbursements under Pakistan's current $7 billion, 37-month IMF programme have risen to about $4.5 billion. An IMF mission is scheduled to visit Islamabad on May 15, 2026 to engage on the next federal budget framework.

IMF financing approval

• ▪The International Monetary Fund's Executive Board approval paves the way for the release of $1.2 billion in financing for Pakistan
• ▪Total disbursements under Pakistan's current International Monetary Fund programme have risen to roughly $4.8 billion with the latest tranche
• ▪The $1.32 billion disbursement to Pakistan includes about $1.1 billion under the Extended Fund Facility and about $220 million under the Resilience and Sustainability Facility
• ▪Pakistan Finance Minister Muhammad Aurangzeb confirmed the International Monetary Fund Executive Board approval on May 8, 2026
• ▪Pakistan is currently under a $7 billion, 37-month International Monetary Fund programme aimed at stabilising the economy through fiscal discipline, structural reforms, and measures to support long-term growth
• ▪The International Monetary Fund's Executive Board approved the latest review of Pakistan's reform programme on May 8, 2026

Pakistan reform benchmarks

• ▪An International Monetary Fund mission is scheduled to visit Islamabad on May 15, 2026 to engage with authorities on the next federal budget framework and review progress on structural reforms
• ▪Pakistan successfully met key structural benchmarks including tax policy measures and adjustments in energy pricing
• ▪The International Monetary Fund has indicated that Pakistan will continue to maintain a tight, data-driven monetary policy stance to anchor inflation expectations and preserve macroeconomic stability
• ▪Pakistan's structural benchmarks are aimed at strengthening fiscal discipline and improving macroeconomic stability

Primary budget surplus targets

• ▪Pakistan's International Monetary Fund programme continues to focus on maintaining a tighter fiscal stance amid ongoing external and regional economic challenges
• ▪Pakistan's reform path will emphasise sustaining a primary budget surplus of around 2 per cent of GDP

Tax base expansion

• ▪Pakistan authorities are expected to pursue additional revenue measures to support a tax-to-GDP increase over the medium term
• ▪Pakistan's reform path will emphasise broadening the tax base and improving compliance in previously under-taxed sectors, including retail and agriculture

Energy sector restructuring

• ▪Pakistan's energy sector tariff adjustments aim to reduce circular debt and improve financial viability in the sector
• ▪Energy sector reforms remain central to Pakistan's International Monetary Fund framework, with commitments to regular and predictable tariff adjustments in electricity and gas
• ▪Pakistan's International Monetary Fund programme envisages continued restructuring and privatisation efforts involving selected state-owned enterprises, aimed at reducing fiscal burdens and improving efficiency

Foreign exchange reserves

• ▪Pakistan's International Monetary Fund programme continues to focus on rebuilding foreign exchange reserves
• ▪The International Monetary Fund's latest review is expected to help support Pakistan's external position, with inflows contributing to a further strengthening of foreign exchange reserves in the coming weeks