The IMF Executive Board will meet on May 9 to decide on the disbursement of a $1.1 billion loan tranche to Pakistan, following a staff-level agreement reached in March.
This development brought a mild recovery in Pakistan’s stock market, which bounced back 135 points after an earlier dip of 500 points. The PSX had opened weak, affected by rising Pakistan-India tensions following a deadly attack in Pahalgam, IIOJK.
Alongside the tranche, Pakistan is also set to receive $1.3 billion in climate financing under a new 28-month programme, bringing total support to $2.3 billion. The funds will target reforms in climate resilience and the energy sector.
Read more: IMF Team Arrives in Islamabad for $1 Billion Climate Funding Talks
The IMF praised Pakistan’s commitment to reforms aimed at reducing public debt and boosting climate resilience. Emphasis was placed on improving water management, environmental protection, and budget reforms.
While the economy shows signs of recovery, the IMF warned of ongoing risks, including geopolitical tensions and global market volatility. It stressed strict adherence to fiscal discipline and avoiding budget overruns.
Pakistan has also pledged to expand cash assistance under BISP and cut energy subsidies to meet IMF targets.
At the IMF and World Bank Spring Meetings in Washington, Finance Minister Muhammad Aurangzeb called for urgent global action on climate change, citing the 2022 floods as proof of the threat. He urged the rapid rollout of the Loss and Damage Fund to support vulnerable nations like Pakistan.
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