IMF board likely to approve $1.2bn for Pakistan on Dec 8

ISLAMABAD: The International Monetary Fund (IMF) has scheduled an Executive Board meeting for December 8, 2025, to approve the disbursement of $1.2 billion to Pakistan under two concurrent programmes, with funds expected to be released on December 9, 2025.

The tranche comprises $1 billion under the $7 billion Extended Fund Facility (EFF) and $200 million under the $1.4 billion Resilience and Sustainability Fund (RSF). The release follows a Staff-Level Agreement (SLA) reached on October 14, 2025, covering the EFF’s second review and RSF’s first review. Upon approval, total disbursements under both arrangements will rise to approximately $3.3 billion.

An IMF team, led by Iva Petrova, held discussions in Karachi and Islamabad from September 24 to October 8 and in Washington, DC, to finalise the SLA. The IMF cited robust programme implementation and highlighted priorities, including sustaining fiscal discipline while supporting flood-affected households, maintaining inflation within the State Bank of Pakistan’s target range, restoring energy sector viability and advancing structural reforms. The IMF also noted progress on the RSF-backed climate agenda, emphasising that recent floods underscore the need for consistent, comprehensive reforms to mitigate climate risks.

Ahead of the Board meeting, the IMF is urging Pakistan to publish and act on its Governance and Corruption Diagnostic (GCD) report. Recommendations include ensuring full transparency of the Special Investment Facilitation Council, creating a central registry of state-owned land and holding entities, conducting performance assessments of judges, publishing asset declarations of bureaucrats and removing the finance secretary from the State Bank of Pakistan’s board. Although, the Finance Ministry cannot legally block publication, it has repeatedly delayed the report’s release, originally due by July 31, 2025, with multiple extensions granted. The report must be published before the Board meeting determining the $1.2 billion disbursement. Upon approval, the disbursement will strengthen external buffers while supporting programme priorities outlined in the SLA, including fiscal discipline, inflation management within the State Bank of Pakistan’s target range, energy sector viability, structural reforms and advancement of the RSF-backed climate agenda. Meanwhile, a visiting IMF technical mission is negotiating with Pakistani authorities on the budget formulation process and operationalisation of the newly established Tax Policy Office (TPO) under the Ministry of Finance. “The IMF’s technical mission is reviewing the budget-making process and its formulation. Recommendations finalised during these talks could lead to a structural benchmark following the IMF review mission’s endorsement, scheduled for February or March 2026,” confirmed senior official sources to The News. The TPO will finalise its operational framework, and tax proposals may be developed during these technical discussions. The IMF’s review mission, expected in Islamabad in February or March 2026, will finalise tax proposals for the 2026-27 budget.