KARACHI: The International Monetary Fund (IMF) said on Saturday Pakistan’s bailout program is “fully financed,” citing nearly $6 billion in external inflows expected in the next fiscal year and renewed commitments from key allies to roll over maturing debt.
The IMF released its country report on Pakistan earlier in the day, offering financial reassurance for the country, which in 2023 was on the verge of default and had to secure emergency funding.
Islamabad had to line up financing guarantees from friendly nations such as Saudi Arabia, the United Arab Emirates and China before the IMF agreed to revive its lending program, a standard condition to ensure the country could meet its external obligations.
Pakistan also secured a $7 billion Extended Fund Facility (EFF) last year after the international lender acknowledged the country’s progress in implementing stringent reforms that led to improved macroeconomic indicators.
“The program is fully financed, with firm commitments for the next 12 months and good prospects for the remainder of the Fund-supported program,” the IMF said in the report.
It added“substantial progress” had been made in realizing financing committed ahead of the EFF request, with $2.6 billion already disbursed or expected to be disbursed in the coming months.
It said these included support from Saudi Arabia, the Islamic Development Bank and a commercial loan backed by a partial guarantee from the Asian Development Bank.
The Fund projected Pakistan would receive around $6 billion in external inflows during the next fiscal year beginning in July.
It added these consist of fresh disbursements from the IMF, oil imports from Saudi Arabia on deferred payment terms, funding from China and other international financial institutions, budget support loans and proceeds from planned bond issuances.
Pakistan also intends to borrow modestly from commercial banks.
“Firm commitments are also in place for an additional $1 billion of financing in the next 12 months,” the IMF said. “Key bilateral partners remain committed to rolling over existing short-term liabilities in the remaining program period.”
The report noted the country’s financial and external conditions had improved, with foreign reserves exceeding program projections and a current account surplus recorded in the first eight months of the ongoing fiscal year.
It said inflation has declined to “historical lows,” although core inflation remains elevated at around 9 percent.
The Fund also noted economic recovery was continuing, but growth in the first half of FY25 was “somewhat lower than anticipated.”
