Karachi, May 23, 2025 – The International Monetary Fund (IMF) has reaffirmed its confidence in economic direction of Pakistan, confirming that the country has successfully met all performance targets under the Extended Fund Facility (EFF) program.
This achievement paved the way for the IMF Executive Board to approve a fresh disbursement of funds to support Pakistan’s economic stabilization and reform plans.
Addressing a press briefing, IMF spokesperson Julie Kozack emphasized that Pakistan had made commendable progress on its reform agenda. She clarified that the IMF disbursements are directed exclusively to the State Bank of Pakistan and are safeguarded by strict program conditions.
“These funds are part of a standard process,” Kozack explained. “The IMF Board regularly reviews member programs to determine if the targets are met and whether adjustments are needed. In Pakistan’s case, all targets were achieved, and reforms were underway—so the Board approved the disbursement.”
She also highlighted that the funding is not for general budget use. “IMF financing is specifically designed to help countries address balance of payments issues. In Pakistan’s case, all disbursements go directly into the central bank’s reserves. They are not used for day-to-day government spending,” she added.
Kozack underlined three key safeguards attached to the Pakistan program:
1. Funds are strictly held by the central bank.
2. There is a zero-lending rule, meaning the central bank cannot lend to the government.
3. The program includes detailed conditions to strengthen fiscal management, ensure transparency, and build economic resilience.
The recent review, completed on May 9, 2025, followed a staff-level agreement reached in March, as part of the EFF program approved in September 2024. The program aims to address structural weaknesses, improve public finance, and strengthen international reserves.
When asked about geopolitical tensions and recent conflict with India, the IMF expressed sympathy for the human toll but maintained neutrality. Regarding appointments, Kozack clarified that the choice of Executive Directors is made by each member country, not the Fund.
On the procedural front, she said IMF Board decisions are usually reached through consensus. In Pakistan’s case, there was broad agreement among Board members, enabling the continuation of the program.
In summary, the IMF reiterated that Pakistan is on the right track, having met the necessary benchmarks. With increased reserves, structural reforms, and better fiscal oversight, the country is now positioned to stabilize its economy further and maintain the trust of international financial institutions.