IMF approves $2.4 billion support for Pakistan under two economic programmes

The Executive Board of the International Monetary Fund (IMF) has approved two financing decisions for Pakistan, disbursing approximately $2.4 billion under its economic reform and climate resilience programmes.

Following its Executive Board meeting on May 9, the IMF said it had completed the first review of Pakistan’s economic reform program supported by the Extended Fund Facility (EFF) arrangement. This enables an immediate disbursement of around $1 billion, taking total disbursements under the arrangement to about $2.1 billion.

In addition, the IMF Executive Board approved Pakistan's request for an arrangement under the Resilience and Sustainability Facility (RSF), providing access of about $1.4 billion. The RSF is intended to help the country address vulnerabilities related to climate change and natural disasters.

The fund had earlier approved Pakistan’s 37-month EFF on September 25, 2024 for the amount of around US$7 billion. This review had allowed Pakistan to immediately access about $1 billion at the time.

With the latest $1 billion extended under EFF, the IMF has disbursed nearly $2.1 billion in loans to Pakistan.

The Executive Board is responsible for conducting the day-to-day business of the IMF. It is composed of 25 Directors, who are elected by member countries or by groups of countries, and the Managing Director, who serves as its Chairman. The voting is based on economic size, and as the largest financial contributor to the IMF, the U.S. receives the largest share of voting power amongst all participating countries at 16.49 percent of the total fund. India, Bangladesh, Bhutan and Sri Lanka collectively get a 3.05 percent vote share.

Noting its strong dissent to IMF’s bailout package for Pakistan, India chose to abstain from voting in the meeting, as the IMF board has no provision to vote against or vote ‘no’ for any loan or proposal. Its Directors can either vote in favour of a proposal, or abstain from voting.