IMF approves $1.2 billion tranche for Pakistan

WASHINGTON: The International Monetary Fund (IMF) has approved a $1.2 billion tranche for Pakistan, ARY News reported.

According to reports, the IMF Executive Board meeting was held in Washington, where the release of the fourth installment of $1 billion under Pakistan’s existing loan programme was approved.

In the same meeting, the IMF also approved $200 million for Pakistan under the Resilience and Sustainability Facility (RSF) programme related to climate change.

The approvals mark the latest disbursement under Pakistan’s ongoing IMF-supported arrangements.

IMF ‘presses’ Pakistan for tight fiscal measures ahead of FY2026-27 budget

Earlier, the International Monetary Fund (IMF) reportedly put pressure on the government of Pakistan to take strict economic decisions in the FY2026-27.

As per details shared by sources with ARY News, the IMF has demanded that tax exemptions and concessions be further reduced in the next budget. It has also urged Pakistan to avoid long-term subsidies on petroleum products.

Sources said the Fund stressed that the timely adjustment of fuel prices is essential to avoid financial strain, particularly amid rising regional tensions.

The IMF has also called for the prompt implementation of recommendations by NEPRA and OGRA regarding electricity and gas tariffs, the sources said and added that officials said that negotiations between the government and the IMF are ongoing to set key targets for the next budget, with expectations of strict fiscal measures in fiscal year 2027.

Also Read: IMF ‘pushes’ for strict rules on imported vehicles in Pakistan

These measures are expected to include broadening the tax base, reducing sales tax exemptions, and controlling public expenditure. The government aims to further increase the tax-to-GDP ratio.

The Federal Board of Revenue’s tax target for the upcoming fiscal year could be around Rs15.5 trillion, sources added.

The IMF has also projected an improvement in Pakistan’s economy in the next fiscal year, with investment and exports expected to play a key role in growth. However, it warned that rising energy and food prices could push inflation beyond targets by the end of the current fiscal year.

The Fund noted that while Pakistan’s economy is showing signs of improvement, global and regional uncertainties continue to pose risks.