The International Monetary Fund (IMF) has approved a combined $2.3 billion in new funding for Pakistan, marking a significant step towards enhancing the country’s economic stability. The approval includes the second tranche of the $7 billion Extended Fund Facility (EFF) and a fresh package under the Resilience and Sustainability Facility (RSF). The decision was made during an Executive Board meeting on Friday, May 9, despite India’s unsuccessful attempt to block the move.
The IMF cleared the disbursement of $1 billion as part of the second tranche under the EFF, a recognition of Pakistan’s improved fiscal performance and progress in meeting key structural benchmarks. Additionally, the Board approved a $1.3 billion RSF package, aimed at supporting Pakistan’s efforts to improve its climate resilience. Unlike the EFF disbursement, the RSF funds will be released over the next 28 months.
This approval follows extensive discussions between the IMF team, led by Mission Chief Nathan Porter, and Pakistani authorities, including a series of meetings from February 24 to March 14 in Karachi and Islamabad, followed by virtual negotiations. A staff-level agreement in March 2025 outlined a reform agenda backed by both federal and provincial governments.
The IMF emphasized that the combined funding program builds on Pakistan’s macroeconomic stabilization over the past year, focusing on strengthening public finances, reducing inflation, rebuilding external reserves, and addressing structural distortions to facilitate private-sector-led growth.
This approval not only provides Pakistan with vital financial support but also reinforces its position with international partners as it continues its economic reform efforts.