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Pakistan, IMF Discuss Reform Progress Ahead of FY2025-26 Budget
Pakistan, eyeing sustainable growth, reviews reform progress with IMF ahead of FY25-26 budget. IMF lauds efforts, disburses $1B under EFF & approves $1.4B for climate resilience via RSF.
ND
by News Desk
2025-05-23
Pakistan, IMF Discuss Reform Progress Ahead of FY2025-26 Budget

As Pakistan prepares to unveil its federal budget for FY2025-26 on June 2, Prime Minister Shehbaz Sharif met with an International Monetary Fund (IMF) delegation led by Jihad Azour, Director of the Fund’s Middle East and Central Asia Department, at the Prime Minister’s Office in Islamabad.

During the meeting, PM Sharif said Pakistan was transitioning from economic stability toward sustainable, long-term growth, with institutional reforms being a top priority to strengthen resilience and maintain macroeconomic gains.

Reform Progress and Disbursements

The IMF delegation expressed satisfaction with the government’s reform agenda under the ongoing Extended Fund Facility (EFF), while reiterating the Fund’s continued support to Pakistan’s reform and growth objectives.

The meeting follows the IMF Executive Board’s recent approval of:

·       Immediate disbursement of $1 billion under the EFF

·       $1.4 billion under the Resilience and Sustainability Facility (RSF) to support climate resilience and disaster preparedness

This brings Pakistan’s total disbursement under the EFF to $2.1 billion to date.

“Pakistan’s policy efforts under the EFF have delivered significant progress in stabilizing the economy and rebuilding confidence amidst a challenging global environment,” the IMF stated.

Key Economic Indicators Highlighted:

·       Inflation fell to 0.3% in April 2025, a historic low

·       Primary fiscal surplus of 2% of GDP achieved in the first half of FY25

·       State Bank of Pakistan reduced the policy rate by 1100 basis points since June 2025 due to improved inflation and macro indicators

·       Foreign reserves rose to $10.3 billion by end-April 2025 and are expected to hit $13.9 billion by end-June

Climate Resilience and Institutional Reforms

The additional $1.4 billion under the RSF will aid Pakistan in enhancing climate adaptation capacity, especially in light of increasing vulnerability to natural disasters. The programme is designed to improve economic and climate resilience through institutional modernization.

Upcoming Budget and Continued Cooperation

The meeting was also attended by Finance Minister Muhammad Aurangzeb, Planning Minister Ahsan Iqbal, and other senior officials. With the FY2025-26 budget approaching, officials reiterated their commitment to:

·       Sustaining macroeconomic stability

·       Deepening institutional reforms

·       Enhancing climate resilience

·       Promoting inclusive growth

The IMF delegation reaffirmed its commitment to work closely with Pakistan as it navigates structural reforms and prepares to present its next fiscal blueprint.
Tagged:

IMF

PakistanEconomy

SustainableGrowth

Budget2025
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