ADB okays $800m package for Pak fiscal reforms

KARACHI: The Asian Development Bank (ADB) has approved an $800 million financing package to support Pakistan’s push for fiscal sustainability and stronger public financial management, amid mounting debt and reform pressures.

The package includes a $300 million policy-based loan and ADB’s first-ever policy-based guarantee of up to $500 million, aimed at mobilising as much as $1 billion from commercial lenders, the Philippines-based lender said on Tuesday.

The funding comes under the Improved Resource Mobilisation and Utilisation Reform Program, Subprogram 2, which supports wide-ranging fiscal and governance reforms. These include overhauls in tax policy and administration, public expenditure management and digital governance — all part of Islamabad’s efforts to contain the fiscal deficit and reduce public debt.

“Pakistan has made significant progress in improving macroeconomic conditions,” said ADB Country Director Emma Fan. “This programme backs the government’s commitment to further policy and institutional reforms that will strengthen public finances and promote sustainable growth.”

The programme also seeks to improve private sector participation by facilitating investment and modernising regulatory frameworks. It is backed by technical assistance and close collaboration with other development partners to enhance long-term fiscal resilience.

The country faces persistent structural imbalances, with tax revenue among the lowest in emerging markets and public debt nearing 75% of GDP.