• Fund approves the disbursement of $ 1 billion under EFF and $ 1.4 billion for a new climate resilience installation
• India refrains from the vote during the Executive Board meeting
• PM Shehbaz Lauds Economic Team, hits New Delhi’s false narrative
Washington: Despite the Indian attempts to derail the Pakistan loan program, the International Monetary Fund (IMF) on Friday, on Friday, two important financing agreements for the country: a disbursement of $ 1 billion under the extended background facilities (EFF) ongoing and a new installation of resilience and sustainability (RSF) aimed at supporting the climate initiatives.
The approval unlocks a total of $ 2.1 billion for Pakistan, including $ 1.4 billion under the RSF program, which covers 28 months and is designed to reinforce the country’s resistance to climate -induced clashes.
In March, the IMF reached an agreement at the personnel level with Pakistan in this new climate financing agreement, together with the first review of the EFF program of 37 months and $ 7 billion that was approved in September 2024, the 24th program supported by the Pakistan IMF to date.
According to the IMF, this assistance is intended to help Pakistan develop resilience and allow sustainable growth.
During the meeting of the FMI Executive Board on Friday, India refrained from the vote. Before the decision, Indian officials had raised objections, claiming a misuse of global funds by Pakistan, statements that Islamabad has constantly rejected as politically motivated.
India’s Foreign Secretary, Vikram Misri, declared Thursday that New Delhi had ordered his representative at the IMF to raise concerns about Pakistan’s eligibility for international financing. He also asked international institutions, including the World Bank and the Financial Action Task Force (FATF), to reassess the state of Pakistan.
Progress in stability restoration
After the discussion of the Board, Deputy Director Manager Nigel Clarke said in a statement that Pakistan had made important progress in the restoration of macroeconomic stability despite a challenging environment.
“Since the approval of the EFF, the economy continues to recover, with strongly lower inflation and remarkably stronger external shock absorbers. However, the risks to perspectives remain high, particularly due to the uncertainty of global economic policy, the increase in geopolitical tensions and persistent internal vulnerability.”
He said that the firm implementation of the FY2025 budget and the approval of key fiscal reforms, in particular the Agricultural Income Tax, supported the process of reconstruction of the credibility of policy formulation.
“Continue mobilizing greater income from the United Sectors and the non -as it will make the tax system more equitable and efficient. This, combined with the discipline of federal and provincial expenses, will strengthen sustainability, develop resilience and reduce the struggle of the public sector outside the private credit.”
According to the IMF official statement, the timely implementation of the energy rate adjustments had helped reduce stock and circular debt flow. “Meanwhile, the reforms on the side of the costs show early signs of success, but must accelerate to safeguard the viability of the energy sector and improve the competitiveness of Pakistan.”
He also accredited the monetary policy position of the State Bank of Pakistan (SBP) as fundamental to reduce inflation to historical minimums. “Monetary policy must remain properly adjusted and data dependent to ensure that inflation is anchored within the objective range of the SBP. A more flexible exchange rate will facilitate the adjustment to external and domestic shocks, helping to reconstruct the reserves.”
He also requested rapid action to address subcapitalized financial institutions and exalted surveillance about the financial sector are necessary for financial stability.
“Accelerating structural reforms will unlock the competitiveness of Pakistan, creating conditions to attract private private investment. Reform priorities include reducing commercial and investment barriers, advancing in soe reforms and decisively strengthening governance and anti -corruption institutions.
In the new RSF, Clarke said he would help reduce Pakistan’s vulnerability to extreme climatic events and improve macroeconomic stability and fiscal sustainability.
“The reforms under the RSF aim to generate resilience to natural disasters by strengthening public investment processes, supporting the efficient use of scarce water resources, strengthening the coordination of natural disaster response and financing, improving information on climate -related risks and supporting Pakistan to fulfill their international commitments.”
PM Lauds Economic Team
Meanwhile, Prime Minister Shehbaz Sharif expressed his satisfaction with the approval of the IMF of the $ 1 billion section for Pakistan, hitting India for what he described as failed and subsisting tactics to sabotage the program, the application reported.
In a statement issued by the Prime Minister’s office, Shehbaz Sharif praised the Prime Minister and Minister of Foreign Affairs, Mohammad Ishaq Dar, to the Minister of Finance, Muhammad Aurengzeb, to the Secretary of Finance Imdadullah Bosal and the entire economic team for its role in ensuring the crucial support of the IMF.
The desperate movements of India to sabotage the IMF program have failed, he said, adding that international financial institutions have rejected the false narrative of India. The prime minister emphasized that the approved IMF section would help stabilize the country’s economy and guide it towards long -term recovery.
Posted in Dawn, May 10, 2025
