Pakistan is set for a key decision next month as the International Monetary Fund (IMF) places the country’s programme review on the agenda of its Executive Board meeting scheduled for May 8.
The board is expected to consider the release of around $1.21 billion, linked to the third review of Pakistan’s Extended Fund Facility and the second review under the Resilience and Sustainability Facility. If approved, the country will receive about $1.0 billion under the EFF and roughly $210 million through the RSF.
This would take total disbursements under the two arrangements to nearly $4.5 billion, offering some relief to Pakistan’s external financing position.
Staff deal already in place
The upcoming board review follows a staff-level agreement reached last month between IMF officials and Pakistani authorities. The IMF team, led by Iva Petrova, had expressed satisfaction with the country’s policy direction at the time.
According to the Fund, Pakistan’s economy has shown signs of improvement after a difficult period. Growth picked up after fiscal year 2025, with activity gaining pace in the early months of the current fiscal year.
Inflation has remained under control compared to previous highs, while the current account has stayed manageable. The IMF also noted that foreign exchange buffers have improved, helping rebuild confidence in the economy.
External risks still in focus
Despite these gains, the IMF has flagged risks that could affect the outlook. Ongoing tensions in the Middle East may push up global energy prices and tighten financial conditions, which could add pressure on inflation and slow economic growth.
Such external shocks remain a concern for Pakistan, given its reliance on imported energy and exposure to global markets.
Reform push seen as key
Separately, IMF Managing Director Kristalina Georgieva, in a recent meeting with Finance Minister Muhammad Aurangzeb during the Spring Meetings, acknowledged the country’s progress on reforms.
She noted that continued implementation of economic policies has helped stabilise the economy and restore investor confidence. At the same time, she stressed that deeper structural reforms would be necessary to keep growth on track and improve living standards.
The May 8 board meeting is now seen as a crucial step, with approval likely to unlock fresh funds and reinforce confidence in Pakistan’s economic recovery path.
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