IMF's Executive Board approves $1.3bn financing for Pakistan's reform programme, flags heightened risks from Middle East war

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 $1.32 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, DC, reflecting its continued support for Pakistan’s ongoing economic reform programme. The approval allows Pakistan to draw about $1.1 billion under the EFF and about $220 million under the RSF, bringing total disbursements under the two arrangements to roughly $4.8 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. In its statement, the IMF said Pakistan’s policy implementation under the programme had remained strong and had helped preserve stability despite a more uncertain global environment. “Pakistan’s strong programme implementation under the EFF arrangement has continued, which has supported macroeconomic stability and the rebuilding of fiscal and foreign exchange buffers,” the Fund said. At the same time, the IMF said external conditions had become more difficult due to geopolitical tensions. “The shocks emanating from the Middle East war underline the continued importance of maintaining strong policies to continue building resilience and of moving ahead with structural reforms to achieve sustainable long-term growth,” it added. The Fund said Pakistan’s economic performance had shown improvement under the programme. It noted that GDP growth had accelerated, inflation had remained contained overall despite recent pressures, and the current account had been broadly balanced in the first n