IMF’s Executive Board to meet on Dec 8 to approve disbursement of $1.2bn to Pakistan

The International Monetary Fund’s (IMF) Executive Board will meet on December 8 (Monday) to approve $1.2 billion in loans to Pakistan.

The IMF had reached a staff-level agreement with Pakistan on its loan programmes in October after extensive talks were held in Karachi, Islamabad and Washington from September 24 to October 8.

The agreement still requires approval from IMF’s Executive Board before funds can be released.

If approved, it would unlock about $1.2bn in fresh financing for the country; roughly $1 billion under the Extended Fund Facility (EFF) and another $200 million under the Resilience and Sustainability Facility (RSF).

The IMF confirmed the date of the meeting in a brief announcement on Friday. The official calendar posted on the IMF website also showed the Executive Board would review Pakistan’s loan programmes.

Negotiations between Islamabad and the lending agency, led by IMF mission chief Iva Petrova, had focused on Pakistan’s fiscal performance, monetary stance, structural reforms and progress on climate-related commitments.

In its earlier assessment, the IMF noted that Pakistan had made “strong progress” in fiscal consolidation, reducing inflation and strengthening external buffers. It also acknowledged the State Bank of Pakistan’s (SBP) continued tight monetary policy, which has played a key role in anchoring inflation expectations.

Structural reforms — especially those related to state-owned enterprises, energy-sector viability, competition and public-service delivery — were cited as areas where the authorities had demonstrated continued commitment.

The Fund also pointed to advances under the RSF-supported climate agenda, including efforts to enhance resilience to natural disasters, strengthen water-resource management and improve the country’s climate-information systems.

These reforms have taken on greater urgency following recent floods that caused widespread damage to agriculture, infrastructure and livelihoods.

Approval of the reviews is widely expected to bolster investor confidence at a critical moment, as Pakistan continues to stabilise its economy amid external pressures and the lingering effects of flood damage.

Islamabad has been under sustained pressure to maintain fiscal discipline, accelerate energy-sector reforms and continue revenue-mobilisation measures to ensure longer-term stability.

The IMF has warned, however, that risks remain elevated. The economic outlook has been tempered by flood-related losses, and the Fund has emphasised that monetary policy must remain “appropriately tight and data-dependent” to keep inflation within the SBP’s target range.

It has also stressed the need for steady implementation of reforms to strengthen competition, enhance productivity, improve public services and reduce persistent vulnerabilities in the energy sector.

If the Board grants its approval on December 8, Pakistan could receive the disbursement as early as the following day.

Officials in Islamabad hope the inflow will reinforce external buffers, support economic recovery and signal continued international confidence in the government’s reform agenda.

Key report released ahead of meeting

Ahead of the meeting, the IMF had released its long-awaited Governance and Corruption Diagnostic Assessment (GCDA), in which it highlighted persistent corruption challenges in Pakistan driven by systemic weaknesses across state institutions and demanded immediate initiation of a 15-point reform agenda to improve transparency, fairness and integrity.

The report, publication of which is a precondition for the IMF Executive Board’s approval of the loan programmes, estimated that Pakistan could boost economic growth by about 5 to 6.5 per cent over five years if it implements a package of governance reforms beginning within the next three to six months.

The report led to criticism of the government, and opposition parties called for a probe into the “worst financial scandal of Pakistan’s history”.

However, Finance Minister Muhammad Aurangzeb stated last week that the report was “not criticism” but a “catalyst for accelerating long-overdue reforms”.

He maintained that the report acknowledged significant progress in sectors including taxation and governance, and that many of its priority recommendations were “already work in progress”.

The finance minister further said the government was committed to implementing the remaining recommendations as part of broader institutional reforms essential to sustaining Pakistan’s economic turnaround.