By Ali Imran
The International Monetary Fund’s Executive Board approved Pakistan’s latest loan review, unlocking about $1.2 billion, Finance Minister Muhammad Aurangzeb said on Friday.
The decision gives Pakistan fresh support as it rebuilds reserves and tries to keep inflation in check, while meeting IMF demands to raise revenue and advance the privatisation of state-owned companies.
Pakistan will have access to about $1 billion under the EFF and about $210 million under the RSF, bringing total disbursements under the two arrangements to about $4.5 billion.
On March 27, the IMF announced that it had reached a staff-level agreement (SLA) for the disbursement of around $1.2 billion following the successful completion of the third review under the EFF and the second review under the Resilience and Sustainability Facility.
The IMF approval came after the government materialised 14 quantitative performance and indicative criteria out of the total 17 envisaged targets under the IMF programme for the end of December 2025, according to The News report.
Pakistan has also given written assurances to the IMF for abandoning the existing system of doling out subsidy on usage of 200 units and adopting a new targeted subsidy for power sector consumers from January 2027.
The targeted subsidy will be provided through the use of data from the Benazir Income Support Programme (BISP). This change of subsidy mechanism will be a difficult decision for the politically elected regime, as currently there are households in the country who have installed two to three meters to curtail their power consumption to less than 200 units from each electricity meter. The targeted subsidy will help curb the misuse of this subsidy.
Speaking to journalists outside the Parliament House on Thursday, Finance Minister Muhammad Aurangzeb declined to comment on whether electricity prices would increase or decrease in the coming months.
He said Prime Minister Shehbaz Sharif and the energy minister were working extensively on reforms in the power sector and that details regarding electricity pricing would be shared later by the Ministry of Energy.
