The International Monetary Fund (IMF) has approved the disbursement of approximately $1.1 billion to Pakistan, marking the completion of the second review under the stand-by arrangement (SBA). This disbursement brings the total funds received under the arrangement to about $3 billion.
During a meeting in Washington, the IMF executive board unanimously agreed to release the final installment of the SBA, with the exception of India, which abstained from the decision.
The IMF highlighted Pakistan’s strengthened policy efforts under the SBA, which have contributed to economic stabilization and a return to modest growth. However, the Fund emphasized the need for Pakistan to continue its policy and reform efforts, including strict adherence to fiscal targets, while also protecting vulnerable segments of society from the potential impact of reforms.
Furthermore, the IMF stressed the importance of maintaining a market-determined exchange rate to absorb external shocks and implementing broad structural reforms to support stronger and more inclusive growth.
The approval by the IMF follows a meeting between Prime Minister Shehbaz and IMF Managing Director Kristalina Georgieva at the World Economic Forum’s special meeting in Riyadh. Prime Minister Shehbaz assured the IMF of the government’s full commitment to restoring Pakistan’s economy.
In response to the IMF’s decision, Prime Minister Shehbaz expressed confidence that the final tranche would bring greater economic stability to Pakistan. He credited the agreement with the IMF for preventing Pakistan from defaulting during his previous tenure and highlighted the positive results of the tough economic decisions taken during that time.
The Prime Minister emphasized that success would not be measured by taking loans but rather by breaking free from the debt cycle. He expressed hope that Pakistan would enter a prosperous era by continuing to work in the right direction and thanked the IMF for its support during difficult times.
Finance Minister Muhammad Aurangzeb indicated that Pakistan is now considering a “longer and larger” economic bailout package with the IMF. The IMF has stated its willingness to support the formulation of a new economic program for Pakistan if requested by the government.