Pakistan has secured a major financial lifeline after the International Monetary Fund approved a loan package worth approximately 1.3 billion dollars, providing critical support to the country’s stabilising but still fragile economy. The approval by the IMF Executive Board marks an important milestone in Pakistan’s economic recovery efforts, especially as the government attempts to balance fiscal discipline with growth-oriented reforms in a challenging global and domestic environment.
According to sources, the IMF cleared around 1.09 billion dollars under the Extended Fund Facility and an additional 200 million dollars through the Resilience and Sustainability Facility. This follows a staff-level agreement reached between Pakistan and the Fund in October after extensive discussions held in Karachi, Islamabad, and Washington under the leadership of mission chief Iva Petrova. The approval reflects growing confidence among international lenders regarding Pakistan’s reform trajectory and commitment to programme targets.
Ahead of the Executive Board’s decision, the IMF released its Governance and Corruption Diagnostic Assessment, which offered a candid view of Pakistan’s long-standing structural weaknesses. The report highlighted entrenched corruption, elite capture, and weaker institutional oversight as key barriers to sustainable economic development. It pointed to persistent revenue leakages, distortions in public spending, and a gradual erosion of public trust in the legal and governance framework, stressing the need for deeper transparency and accountability reforms alongside financial support.
Despite political and operational pressures at home, the Finance Ministry remained focused on keeping the IMF programme on track. Longstanding international partners continued to provide parallel support. Saudi Arabia recently extended its three billion dollar deposit for another year, helping maintain foreign exchange reserves at the State Bank of Pakistan at around 14.5 billion dollars as of November 28. China and the United Arab Emirates have also remained supportive, helping Pakistan maintain short-term external stability during a critical phase of its recovery.
Financial markets had already anticipated a positive IMF decision, and investor sentiment reflected this in recent trading activity. On Monday, the KSE-100 Index closed at 168,303.24 points, gaining 1,217.66 points or 0.73 per cent. The benchmark index touched an intraday high of 168,755.18 as strong buying interest emerged ahead of the IMF board meeting. Analysts expect the official disbursement approval to trigger another active trading session, with foreign inflows and institutional investors likely to show strong interest in the near term.
Pakistan is gradually emerging from one of the most severe macroeconomic crises it has faced in decades. Recent improvements in inflation trends, external account pressures, and reserve levels have eased immediate concerns. However, policymakers and analysts agree that long-term economic health will depend on sustained structural reforms, improved governance, stronger revenue collection frameworks, and a more transparent public finance structure. The latest IMF package, while significant, is seen as a bridge toward deeper reform rather than a final solution to longstanding economic challenges.
This development is widely viewed as a confidence booster for Pakistan’s financial system and broader economic outlook, signalling renewed international trust while underscoring the continued need for disciplined, reform-driven economic management.
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