IMF approves immediate disbursal of $1.1 billion loan tranche to Pakistan

WASHINGTON/ISLAMABAD: The IMF has approved an immediate disbursal of the final tranche of $1.1 billion to Pakistan as part of a bailout package, emphasising that the cash-strapped country needs to take tough measures to bring its economy back on track.

The International Monetary Fund (IMF) Executive Board’s decision on Monday came after the global lender completed the second and final review of Pakistan’s economic reform programme supported by the IMF’s Stand-By Arrangement (SBA).

With this development, the disbursements under the SBA reached around USD 3 billion.

All board members favoured the release of the last instalment. India, however, abstained from voting.

“Given the significant challenges ahead, Pakistan should capitalise on this hard-won stability, persevering beyond the current arrangement with sound macroeconomic policies and structural reforms to create stronger, inclusive, and sustainable growth,” said IMF’s Deputy Managing Director Antoinette Sayeh.

Continued external support will also be critical, she said. Achieving strong, long-term inclusive growth and creating jobs require accelerating structural reforms and continued protection of the most vulnerable through an adequately financed Benazir Income Support Programme, she said.

She said that advancing the reform of state-owned enterprises (SOEs) and ensuring that all SOEs fall under the new policy framework, strengthening governance and anti-corruption institutions, and continuing to build climate resilience was the priority.

The IMF official said Pakistan will receive the loan payment this week.