IMF Completes Pakistan’s EFF & RSF Reviews: SDR 914M Received by SBP

In a significant development for Pakistan’s economic landscape, the International Monetary Fund (IMF) Executive Board has successfully completed two major reviews this week. Specifically, the Board finalised the second review of the Extended Fund Facility (EFF) and the first review of the Resilience and Sustainability Facility (RSF).

Consequently, this approval unlocks an immediate disbursement of funds. The State Bank of Pakistan (SBP) has received approximately SDR 760 million under the EFF and SDR 154 million under the RSF. This brings the total immediate financing to roughly SDR 914 million.

IMF Bolstering Economic & Climate Resilience

The authorities have shown strong program implementation. This progress comes despite the challenges posed by recent devastating floods. According to the IMF, these efforts have effectively maintained stability while improving external conditions.

Currently, total disbursements under these two arrangements stand at approximately SDR 2,434 million.

The government’s policy priorities remain clear. They are centred on maintaining macroeconomic stability. Furthermore, the administration aims to advance reforms in several key areas:

• Strengthening public finances.
• Enhancing competition and productivity.
• Bolstering the social safety net.
• Reforming State-Owned Enterprises (SOEs).
• Improving energy sector viability.

Performance Amidst Challenges

Pakistan’s 37-month EFF, approved in September 2024, is delivering results. Fiscal performance has remained strong. Remarkably, the country achieved a primary surplus of 1.3 per cent of GDP in FY25, aligning perfectly with targets.

However, inflation has seen an uptick. This increase largely reflects the impact of floods on food prices. Fortunately, the IMF expects this inflationary pressure to be temporary.

On the external front, gross reserves have improved significantly. Reserves stood at approximately SDR 11.02 billion (US$14.5 billion) at the end of FY25. This is a substantial rise from SDR 7.14 billion (US$9.4 billion) a year earlier. Projections suggest these reserves will continue to rebuild throughout FY26.

Strategic Reforms & Future Outlook

The 28-month RSF, approved in May 2025, focuses heavily on climate challenges. The recent floods highlight the urgency of these reforms. The program prioritises building resilience to natural disasters and improving water resource usage.

Nigel Clarke, Deputy Managing Director and Acting Chair, emphasised the importance of these reforms. He noted that real GDP growth has accelerated and inflation expectations remain anchored. Clarke stated:

Pakistan needs to maintain prudent policies to further entrench macroeconomic stability.

He further advised that the State Bank of Pakistan (SBP) should maintain an appropriately tight monetary policy to keep inflation in check.

Moreover, the publication of the Governance and Corruption Diagnostic report marks a positive step. Future efforts must focus on SOE governance, privatisation, and enhancing the business environment.

Key Economic Indicators Provided by IMF

Indicator	FY2024	FY2025 (Est.)	FY2026 (Proj.)
Real GDP Growth	2.6%	3.0%	3.2%
Inflation (Avg)	23.4%	4.5%	6.3%
Gross Reserves (SDR)	7.14 Billion	11.02 Billion	13.56 Billion
Primary Balance (% GDP)	0.9%	2.4%	2.5%
Total External Debt (% GDP)	31.8%	30.5%	30.9%

Snapshot of the Economy (2024/25)

• Per Capita GDP: ~ SDR 1,274
• Main Exports (Textiles): ~ SDR 13.15 Billion
• IMF Quota: SDR 2,031 Million

Note: Money values have been converted to SDR based on the implied exchange rate in the IMF report ($1 ≈ SDR 0.76).

As Pakistan moves into the second half of FY26, the focus remains on execution. Consistent implementation of sound macro policies will be vital for sustainable growth.