ISLAMABAD: In a major diplomatic and economic boost for Pakistan, the International Monetary Fund (IMF) has approved the release of a $1 billion tranche under its Extended Fund Facility (EFF), dealing a significant blow to India’s attempts to isolate Pakistan internationally.
The decision, announced on May 9, 2025, marks the completion of the first review of Pakistan’s economic performance under the ongoing 37-month, $7 billion loan programme. The move comes amid heightened regional tensions and underscores growing international confidence in Pakistan’s economic management.
"The IMF Executive Board completed the first review under the Extended Fund Facility Arrangement, allowing the authorities to draw the equivalent of about $1 billion," the IMF stated.
Just last month, Pakistan and the IMF had reached a staff-level agreement on the first review, along with an additional deal under the 28-month $1.3 billion Resilience and Sustainability Facility (RSF) aimed at helping Pakistan manage climate risks and natural disasters.
The IMF board has now also officially endorsed this RSF agreement, unlocking a further $1.4 billion in support for Pakistan’s resilience-building efforts. These financial approvals reflect Pakistan’s adherence to reform commitments and macroeconomic stabilization policies.
"The IMF team has reached a staff-level agreement with Pakistani authorities... subject to Board approval, Pakistan will have access to about $1.0 billion under the EFF, bringing total disbursements to about $2.0 billion," the IMF noted.
Analysts say the funding is a diplomatic setback for India, which has sought to isolate Pakistan following recent cross-border escalations. The IMF’s decision effectively rebuffs those efforts and signals continued global engagement with Islamabad.
The approvals not only ease short-term fiscal pressures but also strengthen Pakistan’s standing in global financial circles at a time when regional rival India is under scrutiny for its aggressive posturing.
