Key Points
- IMF Executive Board to review Pakistan’s loan programme on Dec 8
- Expected approval would unlock $1.2bn under the EFF and RSF facilities
- IMF says Pakistan has made “strong progress” on fiscal and monetary reforms
- Governance report urges a 15-point anti-corruption and transparency agenda
- Islamabad hopes disbursement will boost external buffers and investor confidence
WASHINGTON: The International Monetary Fund’s (IMF) Executive Board is scheduled to meet on December 8 to consider approving a combined $1.2 billion disbursement for Pakistan, the Washington-based lender confirmed on Friday.
The meeting follows a staff-level agreement reached in October, after extensive talks held in Karachi, Islamabad and Washington between September 24 and October 8.
The agreement covers Pakistan’s ongoing Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programmes and requires final Board approval before funds are released.
If endorsed, Pakistan would receive around $1 billion under the EFF and $200 million under the RSF, possibly as early as the following day. The IMF’s official calendar shows that Pakistan’s loan reviews have been formally scheduled for the December 8 session.
IMF notes “strong progress”
IMF mission chief Iva Petrova led the recent negotiations, which focused on Pakistan’s fiscal consolidation, monetary policy stance, structural reforms and climate-related commitments.
In its assessment, the IMF said Pakistan had demonstrated “strong progress” in reducing inflation, stabilising external buffers and maintaining a tight monetary policy through the State Bank of Pakistan.
The lender also highlighted ongoing structural reforms involving state-owned enterprises, energy-sector viability, competition, and public-service delivery—areas it said were essential for long-term stability.
Progress under the RSF climate agenda has included work on disaster resilience, water-resource management and climate-information systems, especially significant after devastating floods in recent years.
The expected approval is seen as critical for bolstering investor sentiment, strengthening external accounts and supporting Pakistan’s economic recovery amid persistent external and post-flood pressures.
Governance report sparks political criticism
Ahead of the Board meeting, the IMF released its long-awaited Governance and Corruption Diagnostic Assessment (GCDA)—a publication required before loan approval.
The report identifies systemic governance weaknesses across state institutions and recommends a 15-point reform plan to improve transparency and public-sector integrity.
It estimated Pakistan could potentially increase economic growth by 5 to 6.5 percent over five years if reforms begin within the next three to six months. Opposition parties criticised the findings, calling for investigations into what they described as the “worst financial scandal” in the country’s history.
Finance Minister Muhammad Aurangzeb rejected the criticism, saying the report was “not an indictment” but a “catalyst to accelerate overdue reforms.”
He said several recommendations were already underway and reaffirmed the government’s commitment to completing the remaining reforms as part of Pakistan’s broader economic turnaround strategy.
Risks remain
Despite progress, the IMF cautioned that risks remain elevated. Pakistan’s economic outlook is still clouded by flood-related losses, and the Fund stressed that monetary policy must remain “appropriately tight and data-dependent” to keep inflation within target.
It also reiterated the need for consistent reforms in energy, taxation, governance and productivity to reduce long-standing vulnerabilities.
If approved on December 8, the disbursement will provide Pakistan with a crucial financial cushion as the country continues efforts to stabilise its economy and strengthen resilience to future shocks.
