Islamabad – Wednesday, 14 May 2025:
The State Bank of Pakistan (SBP) confirmed on Wednesday that it has received the second tranche of $1.023 billion from the International Monetary Fund (IMF) under the ongoing Extended Fund Facility (EFF). This disbursement comes shortly after the IMF’s Executive Board approved the first review of Pakistan’s performance under the loan programme during a meeting held in Washington, D.C., on May 9.
According to the SBP, the inflow will be recorded in the foreign exchange reserves for the week ending May 16, 2025, helping to strengthen Pakistan’s external financial position. The total value of the current EFF programme stands at $7 billion.
In addition to the EFF, the IMF has approved a new 28-month Resilience and Sustainability Facility (RSF), granting Pakistan access to an additional $1.3 billion. The RSF is specifically aimed at bolstering climate resilience, in response to the increasing frequency of extreme weather events in the country, such as floods and heatwaves.
In its post-meeting statement, the IMF acknowledged Pakistan’s progress in restoring macroeconomic stability, including a notable reduction in inflation, now at its lowest level since 2015, and improvements in financial and external indicators. However, the Fund also pointed out structural challenges, such as a narrow tax base, weak governance, and underinvestment in vital sectors like education, healthcare, and infrastructure.
The SBP emphasized that the latest IMF inflow would help bolster Pakistan’s external buffers, support investor confidence, and advance the country’s economic reform agenda, which focuses on achieving sustainable and inclusive growth.
Budget 2025–26 Talks Begin Online
Meanwhile, Pakistan and the IMF have initiated virtual discussions from May 14 to May 16 to begin detailed consultations on the federal budget for the fiscal year 2025–26. According to official sources, the initial phase of these talks will be held online, after which an IMF delegation is expected to arrive in Islamabad. The policy-level negotiations will likely continue until May 23.
These budgetary discussions are part of Pakistan’s commitments under the EFF, as the government works to finalize fiscal targets and meet IMF benchmarks ahead of the new fiscal year starting July 1, 2025.
Economists and analysts view the disbursement and budget talks as a crucial step for Pakistan to address its balance of payments issues, improve investor sentiment, and chart a course toward fiscal discipline and climate adaptation.
