IMF Approves New $1.2 Billion Loan for Pakistan

The International Monetary Fund has approved a new $1.2 billion loan for Pakistan to support economic stabilization and strengthen resilience against climate-related crises.

The IMF confirmed the decision on Monday, December 8, after an executive board meeting in Washington, stating that the loan falls under its dual-track economic rescue framework.

According to the IMF, the funds are intended to help Pakistan improve its financial stability while preparing for climate shocks, natural disasters, and infrastructure vulnerabilities.

Pakistani newspaper Dawn reports that the latest payment brings the total disbursement under the Extended Fund Facility and Resilience and Sustainability Facility to nearly $3.3 billion.

Economists say the financing will assist the government in servicing external debt, enhancing foreign reserves, and investing in key areas such as water systems and climate-related infrastructure.

The loan comes as Pakistan continues to struggle with inflation, currency fluctuations, high public debt, and limited fiscal space, challenges that have repeatedly pushed the country close to default.

While the new funding provides short-term relief, analysts warn that Pakistan must implement deeper structural reforms, including tax expansion and governance improvements, to secure long-term economic stability.

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