IMF releases $1 billion tranche under new bailout package

The International Monetary Fund (IMF) Executive Board has approved a $7 billion loan for Pakistan under the Expanded Fund Facility (EFF), and immediately released nearly $1 billion to help Pakistan address its economic challenges and restore macroeconomic stability.

In a statement announcing the new loan program, which spans 37 months, the IMF noted that Pakistan’s economic growth rate has reached a modest 2.4% in the last fiscal year, and inflation fallen significantly to single digits. 

This improvement was largely driven by activities in the agricultural sector and the implementation of adequate fiscal and monetary policies, which helped keep the country’s current account deficit under control. This allowed the foreign exchange reserves to improve again, while the decline in inflation reflects an improvement in the internal and external conditions. 

The IMF noted that the State Bank of Pakistan (SBP) has also cut its policy rate by 450 basis points since June, contributing to a recovery in foreign exchange reserves, adding that a strong budget was presented in June 2024.