IMF Approves $1.2 Billion Fresh Disbursement to Pakistan amid Flood Recovery

The IMF approved a $1.2 billion disbursement to Pakistan under its Extended Fund Facility and climate Resilience Sustainability Facility, recognizing Pakistan's macroeconomic stability despite floods.

On December 8, 2025, the IMF Executive Board approved a $1.2 billion disbursement to Pakistan under a dual-track bailout program comprising the Extended Fund Facility (EFF) and the Resilience Sustainability Facility (RSF). Pakistan is currently in its 24th IMF program, initiated last year, designed to provide $7 billion over 39 months. The latest disbursement includes $1 billion from the EFF and $200 million from the RSF. The IMF praised Pakistan's ability to maintain macroeconomic stability and improve external financing conditions despite the challenges posed by devastating floods. Pakistan achieved a primary fiscal surplus of 1.3% of GDP in FY25, and its gross reserves rose to $14.5 billion, up from $9.4 billion the previous year, with a current account surplus of $2.1 billion. Inflation increased temporarily due to flood impacts on food prices. The IMF highlighted Pakistan's policy priorities, including public finance reforms, enhancing competitiveness, social safety nets, state-owned enterprise reforms, public service improvements, and energy sector viability. The RSF tranche supports climate adaptation and disaster resilience efforts. Pakistani officials described the approval as a sign of confidence in the country's reform efforts, though the IMF has emphasized the importance of converting commitments into tangible recovery. Previously, the IMF expressed concerns about weak financial management and recommended minimizing misuse of public funds.