The IMF unlocks $ 1 billion for Pakistan as Indian pressure drops flat

• India had urged the IMF to review its financial support in Islamabad.
• The prime minister says international institutions rejected the false propaganda of India.
• Pakistan also ensures $ 1.3B under the durability and viability installation.

The Executive Board of the International Monetary Fund (IMF) approved the immediate disbursement of about $ 1 billion in Pakistan in the context of continuing extended fund facilitation and allowed an additional arrangement for the installation of 1.3 billion dollars.

“Today, the Executive Board of the International Monetary Fund (IMF) has completed the first review of the Pakistan Economic Reform Program supported by the EFF regulation,” the global lender said in his official statement.

“This decision allows an immediate disbursement of about $ 1 billion (SDR 760 million), bringing total disbursements under the agreement to about $ 2.1 billion ($ 1.52 billion).”

“In addition, the IMF Executive Board approved the authorities’ request for an agreement under the resilience and sustainability unit (RSF), with access to approximately $ 1.4 billion (SDR 1 billion),” he added.

Pakistan secured a smooth IMF nod despite India’s efforts to hinder the loan, as tensions between neighboring South Asia expressed neutralization after a deadly attack on Pahalgam.

New Delhi urged the Fund to review its financial support to Islamabad. “India’s executive director in the IMF will submit the country’s position to a Board of Directors on Friday.” Reuters Foreign Minister Vikram Misri said on Thursday.

A PMO statement released shortly after approval said: “Prime Minister Shehbaz Sharif is pleased with the IMF approval for a billion dollars for Pakistan and the failure of India’s tactics against it.”

“India is trying to divert attention from our national development through unilateral aggression and criminals conspiracy,” the prime minister said. “International institutions have responsibly rejected India’s false propaganda.”

The “lender of the latest solution” and Islamabad reached an agreement at the SLA level (SLA) and agreed on the first revision of the $ 7 loan unit in March. SLA, a 28 -month deal, would support Pakistan’s efforts to mitigate and adapt to climate change, the IMF had said then.

Pakistan secured a $ 7 billion rescue program last year and received a new $ 1.3 billion resistance loan in March.

The program is crucial to the $ 350 billion economy, and Pakistan has said it has stabilized under the rescue that has helped prevent a threat to default.

Prior to the executive council meeting, Finance Minister Muhammad Aurangzeb recently met with IMF CEO Kristalina Georgieva on the sidelines of the World Bank-IMF 2025 in the spring in Washington and confirmed the government’s commitment to government reforms.

In the World Economic Perspective report, the IMF noted that the country’s GDP growth for the next financial year (2025-26) is expected to rise to 3.6%.

Separately, the lender has downgraded the promotion of Pakistan’s economic growth for current use from 3% to 2.6% – the World Bank, however, raises an increase of 2.7% in the financial year expiring in June 2025.

Inflation in Pakistan – which amounted to 23.4% in 2024 – is projected to 5.1% for the current year, with the IMF projecting further to 7.7% in the following financial year.

The IMF also reviewed its prediction for the Pakistani running account deficit. It now expects that the deficit will remain at 0.1% of GDP, compared to its previous estimation for 1%.

In nominal terms, the current transaction gap is expected to be just $ 400 million, instead of the previously projected $ 3.7 billion.

For 2026, the lender expects that the current account deficit will further increase 0.4% of GDP.

The unemployment rate is expected to remain at 8% in 2025 – under 8.3% in 2024 – with a further expected reduction to 7.5% in 2026, according to the report.

In addition to optimistic IMF funding, Pakistan, according to Finmin Aurangzeb, asked China to boost the $ 10 billion yuan ($ 1.4 billion).

“Pakistan has already an existing 30 billion yuan exchange line [….] From our point of view, the wear of 40 billion would be a good place to move on to […] We just put on this request, “the minister said, addressing a press conference after his trip to the US week.