IMF Approves $1.2 Billion Relief for Pakistan Amid Deepening Economic Crisis

The IMF has approved a $1.2 billion loan for Pakistan under EFF and RSF programs, signaling cautious confidence in Pakistan’s economic stability. However, IMF warns that strong reforms, strict accountability, and improved financial management are essential for long-term recovery.

Post Published By: Karan Sharma

Updated : 9 December 2025, 6:48 PM IST

IMF approves new $1.2 billion aid for Pakistan: What's the full story?

New Delhi: The International Monetary Fund (IMF) has approved new financial assistance of approximately $1.2 billion for Pakistan. This amount has been provided under a bilateral agreement.

This aid comes at a time when Pakistan is under immense economic pressure, and managing its economy has become a challenge following the recent devastating floods. The IMF's decision indicates that despite the difficult circumstances, Pakistan has managed to maintain a degree of economic stability.

IMF Signs Staff-Level Agreement with Pakistan, Will Provide $1.2 Billion in Economic Assistance

Funds released through two main programs

According to a report in the Pakistani newspaper Dawn, this assistance has been approved under two important IMF programs:

• Extended Fund Facility (EFF)—for long-term financial stability
• Resilience and Sustainability Facility (RSF)—focused on climate and sustainable reforms

Under these two schemes, Pakistan has been allowed to draw a total of $1.2 billion. Of this, $1 billion will be provided under the EFF and $200 million under the RSF.

Pakistan has been continuously involved in the IMF program. Pakistan is already part of the IMF's 24th program, under which $7 billion in financial assistance was approved last year. This amount was to be disbursed over 39 months. The IMF's recent approval is an extension of that plan.

Pakistan Gets 24 IMF Bailouts But Its Economy Still Struggles (Image Source: Internet)

IMF's warnings and advice

IMF Deputy Managing Director Nigel Clarke said that amidst global economic instability, Pakistan needs more cautious financial policies.

He clarified that Pakistan needs to:

• Strengthen its macroeconomic framework,
• Promote the private sector,
• And accelerate reforms for sustainable development.

Pakistan government's claim

Islamabad has presented this approval as a sign of global confidence in its economic management and reforms. However, government officials have also acknowledged that the real test lies in implementing these promises on the ground.

How many times has Pakistan approached the IMF for a bailout package?

The IMF had previously expressed dissatisfaction. Last month, the IMF had expressed dissatisfaction with Pakistan's financial management. He complained that:

• Government funds were poorly monitored.
• There was a lack of transparency in the use of resources.
• Taxpayers' money was being used for political purposes.

The IMF had urged Pakistan to ensure strict accountability and prevent the misuse of public funds.