The International Monetary Fund (IMF) on Tuesday approved a fresh disbursement of about $1.2 billion for Pakistan, even as it continues to sharply criticise Islamabad’s financial management and control over public funds.
The IMF Executive Board completed the second review of Pakistan’s 37‑month Extended Fund Facility (EFF) and the first review of its Resilience and Sustainability Facility (RSF), allowing an immediate release of around $1 billion under the EFF and USD 200 million under the RSF. This takes total disbursements under the two arrangements to roughly $3.3 billion out of a combined $8.4 billion package.
In its official statement from Washington, the IMF said Pakistan’s policy efforts under the EFF have delivered “significant progress” in stabilising the economy, pointing to a primary budget surplus of 1.3 per cent of GDP in FY25, higher foreign exchange reserves of $14.5 billion versus $9.4 billion a year earlier, and improved external financing conditions, reports stated.
Inflation has picked up again due to food prices after severe floods, but the IMF noted that it expects this to be temporary if macro‑policies remain tight.
Deputy Managing Director and Acting Chair Nigel Clarke praised Pakistan’s “strong programme implementation” despite recent shocks and urged authorities to “maintain prudent policies” while accelerating reforms for stronger, private‑sector‑led and sustainable growth.
The IMF has particularly pushed Islamabad to raise more tax revenue, privatise loss‑making state‑owned firms such as Pakistan International Airlines, and clean up the energy sector, where timely tariff hikes have started to slow the build‑up of circular debt.
IMF slammed Pak fiscal policy 2 weeks ago
This latest announcement comes barely two weeks after the IMF issued some of its harshest assessments in years of Pakistan’s fiscal governance. A recent IMF technical assessment and Pakistan‑focused media reports highlighted “ongoing dissatisfaction” with weak cash management, fragmented responsibilities between agencies, and poor accountability over how public resources are allocated and spent.
The IMF warned that the current Treasury Single Account framework and debt‑cash coordination are inadequate, allowing room for misuse of taxpayer money for “personal or political agendas” and leading to massive budget overruns approved by parliament.
On one end, there was strong praise for macro‑level stabilisation and continued disbursements on one side. On the other hand, there was pointed criticism of day‑to‑day financial management. The IMF’s rationale seems to be a mystery. But it also shows that Pakistan is keeping its economy floating with the handouts of the IMF.
