Pakistan Secures IMF Loan Tranche in Boost to Economic Stability
Pakistan has received a fresh IMF loan tranche worth $1.2 billion. The State Bank of Pakistan confirmed the transfer after the IMF Executive Board approved the release. The amount will appear in the country’s foreign reserves for the week ending December 12, 2025.
The approval followed the IMF Board’s meeting on December 8. The global lender completed its second review under the Extended Fund Facility and the first review under the Resilience and Sustainability Facility. As a result, Pakistan gained access to funds aimed at economic reforms and long-term climate resilience.
Economic Outlook
IMF Deputy Managing Director Nigel Clarke welcomed Pakistan’s steady reform progress. He noted that economic indicators have improved. For example, real GDP growth has picked up, and inflation expectations have become more stable. In addition, fiscal and external pressures have eased compared to earlier periods.
He stressed that Pakistan must keep prudent policies in place. This approach will help secure macroeconomic stability in uncertain global conditions. Clarke also said the country’s commitment to its FY2026 primary balance target sends a positive message. The target remains firm even as the government provides relief to communities affected by severe floods.
The IMF highlighted the need for broader tax reforms. Therefore, it encouraged Pakistan to simplify tax rules and expand the base. This shift can strengthen fiscal sustainability and create room for investment in climate resilience, social protection, and human development.
Clarke also praised the monetary stance. The IMF believes a tight policy has helped control inflation. However, it urged Pakistan to keep communication clear to support effective decision making. The organization also advised the SBP to maintain exchange rate flexibility and deepen the foreign exchange market.
Reform Momentum
The IMF called for continued progress on structural reforms. It appreciated the publication of the Governance and Corruption Diagnostic report, noting it as a key step. In addition, it recommended improvements in SOE governance, privatization efforts, and the business environment.
Prime Minister Shehbaz Sharif welcomed the IMF’s decision. He said the recognition reflects the hard work of the economic team led by Finance Minister Muhammad Aurangzeb. According to him, the approval shows confidence in Pakistan’s reform journey and commitment to growth.
