The International Monetary Fund (IMF) has some good news for Pakistan amid its economic turmoil. According to reports, on Friday, the IMF’s Executive Board approved a $1.2 billion (₹11,322.25 crore) loan for Pakistan, through two different facilities. This would benefit Pakistan’s troubled economy.

The International Monetary Fund (IMF) agreed to provide Pakistan with a total amount of $7 billion (₹66,047.03 crore) through the Extended Fund Facility (EFF) for 37 months in September 2024. Out of the newly approved loan, Pakistan is expected to receive $1 billion (₹9,435.29 crore) under the EFF. Moreover, $210 million will be provided under the Resilience and Sustainability Facility (RSF) to address the climate crisis. So far, Pakistan has received $4.5 billion (₹42,458.81 crore) from two loan packages totaling $8.4 billion (₹79,256.44 crore). The Express Tribune newspaper reported that this amount will be released early next week, increasing the central bank's reserves to over $17 billion.

This IMF approval is a result of the improved fiscal performance demonstrated by the Pakistani government. Pakistan has successfully met all economic targets set for December 2025. However, the Federal Board of Revenue's performance has fallen short of expectations. To compensate for the shortfall in tax collection, the government has increased petroleum levy rates. Finance Minister Muhammad Aurangzeb has assured the country that the country will remain steadfast on the path of reforms.

Pakistan has pledged to the IMF that it will not deviate from fiscal targets despite the West Asian conflict. The government will achieve a primary budget surplus target of ₹3.4 trillion. The upcoming budget will also be prepared in consultation with the IMF. It will be a tight budget, focusing on stability rather than a reckless pursuit of economic growth. However, there are concerns that these stringent policies will lead to increased unemployment and poverty.