International Monetary Fund has approved the latest loan review for Pakistan, unlocking approximately $1.2 billion in fresh financing under the ongoing bailout programme, Finance Minister Muhammad Aurangzeb confirmed on Friday.
The approval provides crucial financial breathing space for Pakistan as the country struggles to strengthen foreign exchange reserves, control inflation, and stabilise its fragile economy amid tough reform conditions imposed by the IMF.
Pakistan to Receive Over $1.2 Billion Under IMF Programmes
According to official details, Pakistan will gain access to nearly $1 billion under the Extended Fund Facility (EFF), while an additional $210 million will be released under the Resilience and Sustainability Facility (RSF).
With the latest tranche, total disbursements under the two IMF arrangements will rise to nearly $4.5 billion.
Earlier, on March 27, the IMF announced that it had reached a staff-level agreement (SLA) with Pakistan following the successful completion of the third review under the EFF and the second review under the RSF.
Pakistan Meets Most IMF Targets
Reports indicate that the government successfully achieved 14 out of 17 quantitative performance and indicative targets set by the IMF for December 2025.
The approval is being viewed as a positive signal for international lenders and investors, as Pakistan continues implementing difficult economic reforms aimed at restoring macroeconomic stability.
Govt Agrees to End Electricity Subsidy System
In a major policy shift, Pakistan has reportedly provided written assurances to the IMF to abolish the existing electricity subsidy mechanism for consumers using up to 200 units of power.
Under the new arrangement, targeted subsidies will instead be distributed through data collected under the Benazir Income Support Programme starting from January 2027.
The move is intended to stop misuse of electricity subsidies, as many households were allegedly using multiple electricity meters to remain within the subsidised consumption threshold.
Electricity Price Uncertainty Raises Concerns
Speaking outside Parliament House, Finance Minister Muhammad Aurangzeb avoided confirming whether electricity prices would increase or decrease in the coming months.
He said Prime Minister Shehbaz Sharif and the Ministry of Energy were actively working on power sector reforms, adding that detailed plans regarding electricity tariffs would be announced later.
IMF Conditions Continue to Shape Economic Policy
The IMF programme remains central to Pakistan’s economic survival strategy, but critics warn that continued reforms tied to taxation, energy pricing, and privatisation could increase financial pressure on ordinary citizens.
Analysts believe the latest IMF approval may help stabilise the rupee and improve investor confidence, although concerns remain over rising utility costs and inflationary pressures in the months ahead.