Pakistan receives $1.3b from IMF as talks begin in Islamabad

Pakistan has received approximately $1.3 billion from the International Monetary Fund (IMF) following the successful completion of key programme reviews, reported 24News HD TV Channel on Wednesday.
According to the central bank, the IMF Executive Board completed the third review under Pakistan’s Extended Fund Facility (EFF) during its meeting held on May 8, 2026. 
Following the review, the Board approved the disbursement of Special Drawing Rights (SDR) 760 million to Pakistan.
In addition, the IMF approved the second tranche of SDR 154 million under the Resilience and Sustainability Facility (RSF), a program designed to support countries in strengthening economic resilience and addressing climate-related vulnerabilities.
As a result, the SBP received a total of SDR 914 million, equivalent to roughly $1.3 billion, from the IMF on May 12, 2026.
The central bank stated that the inflow will be reflected in Pakistan’s official foreign exchange reserves for the week ending May 15, 2026.
On the other hand, International Monetary Fund (IMF) delegation has arrived in Pakistan and negotiations have begun between Pakistan and the delegation in Islamabad, reported 24NewsHD TV channel on Wednesday.
Important meetings are scheduled between IMF and Finance Ministry officials.
New budget targets, tax revenue and financial reforms will be discussed in the meetings.
Progress in energy reforms and privatization will also be reviewed in the meetings.
According to sources, formal negotiations between Pakistani authorities and the IMF have begun today and are expected to continue for around one and a half weeks.
The discussions will focus on finalising major fiscal targets, revenue projections, expenditure frameworks and macroeconomic indicators for the next financial year.
Sources said the upcoming talks will determine the budget targets for FY2026-27, including commitments linked to Pakistan’s ongoing IMF programme.
Officials familiar with the preparations said the IMF has so far not held discussions with the federal government regarding the transfer of the Benazir Income Support Programme (BISP) to the provinces, despite speculation surrounding possible decentralisation measures.
Economic managers are also expected to brief the IMF delegation on emerging risks to Pakistan’s economy stemming from the tense regional situation and instability in the Middle East.
Sources warned that inflationary pressures could intensify this year due to rising geopolitical tensions, particularly if global oil prices continue to surge. Estimates shared with the IMF suggest international crude oil prices could fluctuate between $82 and $125 per barrel under different regional conflict scenarios.
In view of possible revenue pressures, the government may consider imposing additional petroleum levy charges or sales tax on petroleum products, sources added.
Officials also expressed concern that prolonged instability in the Middle East could negatively affect Pakistan’s external sector. According to sources, Pakistan’s remittance inflows may decline if Gulf economies slow down because of war-related uncertainty.
Sources further indicated that employment opportunities for Pakistani workers in Gulf countries could also shrink, creating additional economic challenges for the country.
The IMF has reportedly been informed that Pakistan intends to maintain a primary surplus balance of 1.3 percent of GDP during the first year of the fiscal framework, while the surplus is projected to improve to 1.6 percent of GDP in the following year.
Meanwhile, the current account deficit is expected to remain at 0.4 percent of GDP during the ongoing fiscal year and may widen slightly to 0.9 percent of GDP next year, according to projections shared during preparatory discussions.
Sources said Pakistani authorities have defended the State Bank of Pakistan’s tight monetary policy, arguing that it played a key role in controlling inflationary trends over the past year.
Officials also maintained that the country’s foreign exchange reserves were not built solely through external borrowing, but were supported by broader macroeconomic stabilisation measures and improved inflows.
Reporter: Waqas Azeem