IMF's Executive Board meets today to review $1.2bn loan for Pakistan

• Pakistan awaits IMF approval of $1.2bn under two facilities.
• IMF reviews Pakistan’s loan request after October SLA.
• Pakistan expects $1bn under EFF and $200m via RSF.

ISLAMABAD: The International Monetary Fund’s (IMF) Executive Board is scheduled to meet today (Monday) to consider the approval of $1.2 billion in financing for Pakistan.

The global lender's board meeting follows a staff-level agreement reached in October between Pakistan and the IMF on the country’s ongoing loan programmes.

If endorsed, Pakistan is expected to receive nearly $1.2 billion through two facilities, about $1 billion under the Extended Fund Facility (EFF) and an additional $200 million through the Resilience and Sustainability Facility (RSF).

An IMF team, led by Iva Petrova, held discussions in Karachi and Islamabad from September 24 to October 8 and in Washington, DC, to finalise the SLA. The IMF cited robust programme implementation and highlighted priorities, including sustaining fiscal discipline while supporting flood-affected households, maintaining inflation within the State Bank of Pakistan’s target range, restoring energy sector viability and advancing structural reforms.

The IMF also noted progress on the RSF-backed climate agenda, emphasising that recent floods underscore the need for consistent, comprehensive reforms to mitigate climate risks.

Ahead of the Board meeting, the lender released its Governance and Corruption Diagnostic (GCD) report. 

The report has warned that persistent corruption and weak institutions continue to undermine the country’s economic development even as it stabilises under an Extended Fund Facility (EFF). 

"Corruption is a persistent challenge in Pakistan, with significant adverse implications for economic development," the report noted. It says indicators reflect weak control of corruption over time, with negative consequences for the effectiveness of public spending, revenue collection and trust in the legal system.

The report mentioned that Pakistanis are often compelled to make continuous payments to officials to obtain basic services, while funds lost to corruption could otherwise support higher production and development.

The report read that political and economic elites have obstructed economic development by seizing control of policies and capturing public benefits for their own gain.