International Monetary Fund (IMF) has approved $1 billion Loan to Pakistan, Check All Details Here

The International Monetary Fund (IMF) has completed its first review of Pakistan’s ongoing loan program and approved the release of about $1 billion. This is part of a larger $7 billion program (called the Extended Fund Facility or EFF) to help Pakistan stabilize its economy. The IMF said Pakistan is making good progress, especially in improving its economy and financial situation.

Looking ahead, Pakistan plans to focus on reforms that will improve competition, boost productivity, fix state-owned companies, improve public services and the energy sector, and prepare for climate-related challenges.

In addition to the $1 billion, the IMF also approved a new program for Pakistan under the Resilience and Sustainability Facility (RSF). This program will give Pakistan access to about $1.4 billion to help the country deal with climate change and natural disasters.

This decision was made during a board meeting on Friday. India did not vote in the meeting. According to the Indian Finance Ministry, India stayed out of the vote because it had concerns that Pakistan might misuse the money, possibly even for supporting terrorism across borders.

India strongly disagreed with the IMF’s decision to give more money to Pakistan. Reuters quoted a statement from Pakistan saying that the IMF released $1 billion after reviewing the first part of the program. So far, Pakistan has received $2 billion out of the $7 billion total.

India warned that money from international organizations like the IMF could be misused by Pakistan for military or terrorist activities. Other countries in the IMF also shared similar concerns.

Opposition parties in India criticized the government for not voting “No.” Congress MP Jairam Ramesh said the government should have clearly voted against the loan. However, Indian officials said that IMF rules don’t allow for a formal “No” vote—countries can only vote “Yes” or choose not to vote at all.

India also pointed out that Pakistan keeps receiving bailouts from the IMF despite not following through on past promises. India argued that this raises questions about how effective IMF programs really are for Pakistan. The Finance Ministry said Pakistan has received IMF money for 28 out of the last 35 years, and four times since 2019 alone.

India further said that Pakistan’s military is heavily involved in the country’s economy and politics, which makes it hard to carry out real reforms. A 2021 UN report said that Pakistan’s military runs the country’s largest group of businesses, and that situation hasn’t improved.

India also referred to a past IMF report that said politics often influences IMF decisions about Pakistan. It warned that because of so many bailouts, Pakistan now owes a lot of money and the IMF might feel pressured to keep helping them. India’s Foreign Secretary said the IMF should think carefully before giving more money to Pakistan.

IMF Praised Pakistan

IMF Deputy Managing Director Nigel Clarke said Pakistan has made good progress despite tough global conditions. He praised Pakistan’s efforts to lower inflation, grow reserves, and keep the economy stable. However, he warned that risks remain, including global uncertainty and domestic challenges. Important updates shares by IMF are as follows:

• Pakistan’s economy is recovering: Inflation has fallen sharply (down to 0.3% in April), foreign reserves have grown, and the budget is being managed well.
• Monetary policy is working: The central bank has cut interest rates by 11 percentage points since June 2025 due to lower inflation.
• Reserves are increasing: From $9.4 billion in August 2024 to $10.3 billion in April 2025, expected to rise further to $13.9 billion by June 2025.

Pakistan Economy Highlights

• Population: 236.0 million (2023/24)
• Per Capita GDP: US$1,566.0 (2023/24)
• IMF Quota: SDR 2,031 million
• Poverty Rate: 21.9%
• Main Exports: Textiles: US$16.3 billion (2023/24)