IMF's Executive Board approves $1.2 billion financing for Pakistan's reform programme

WASHINGTON: The International Monetary Fund’s (IMF) Executive Board on Friday approved the latest review of Pakistan’s reform programme, paving the way for the release of $1.2 billion in financing under the ongoing arrangements. In Islamabad, Finance Minister Muhammad Aurangzeb also confirmed the approval, saying the decision reflects Pakistan’s continued progress on difficult but necessary economic reforms. The approval was given at a meeting of the IMF Executive Board in Washington, D.C., reflecting continued support for Pakistan’s ongoing economic reform programme. The disbursement includes around $1 billion under the Extended Fund Facility (EFF) and approximately $200 million under the Resilience and Sustainability Facility (RSF). With this tranche, total disbursements under the current programme rise to about $4.5 billion. The IMF said the approval comes after Pakistan successfully met key structural benchmarks, including tax policy measures and adjustments in energy pricing, aimed at strengthening fiscal discipline and improving macroeconomic stability. Officials said the programme continues to focus on rebuilding foreign exchange reserves, containing inflationary pressures, and maintaining a tighter fiscal stance amid ongoing external and regional economic challenges. According to programme details, Pakistan’s reform path going forward will emphasise sustaining a primary budget surplus of around 2 per cent of GDP, broadening the tax base, and improving compliance in previously under-taxed sectors, including retail and agriculture. Authorities are also expected to pursue additional revenue measures to support a tax-to-GDP increase over the medium term. Energy sector reforms remain central to the IMF framework, with commitments to regular and predictable tariff adjustments in electricity and gas to reduce circular debt and improve financial viability in the sector. The programme also envisages continued restructuring and privatisation efforts involving selected