Pakistan nears IMF deal for $1.2 billion loan tranche
Pakistan expects to reach a staff-level agreement with the International Monetary Fund (IMF) this week, paving the way for a $1.24 billion payout, Finance Minister Muhammad Aurangzeb said on Monday.
The agreement would mark progress under the IMF’s $7 billion Extended Fund Facility (EFF) and the $1.4 billion Resilience and Sustainability Facility (RSF) approved in 2024 to stabilize Pakistan’s struggling economy, News.Az reports, citing Reuters.
“We had very constructive dialogue around quantitative and structural benchmarks,” Aurangzeb told Reuters on the sidelines of the IMF-World Bank Annual Meetings in Washington. “During the course of this week, we’re hoping that we can get the SLA done.”
Pakistan’s economy, valued at $370 billion, has been recovering from a deep financial crisis marked by soaring inflation, a weakening rupee, and widening fiscal deficits. The IMF’s latest review is essential to maintain the flow of funds needed to support stabilization measures.
Aurangzeb also revealed that Pakistan plans to launch its first yuan-denominated “green Panda bond” before the end of the year and return to international markets in 2026 with a bond issuance of at least $1 billion.
“Euro, dollar, Sukuk, Islamic Sukuk — we’re keeping our options open,” he said.
The government’s privatization programme, long seen as key to reforming state finances, is also moving forward. Aurangzeb confirmed progress in the sale of three power distribution companies and the national airline, Pakistan International Airlines (PIA).
Five domestic business groups — including Airblue, Lucky Cement, Arif Habib Group, and Fauji Fertilizer — have shown interest in acquiring PIA, which recently regained lucrative flight routes to Europe and the UK.
“We are quite hopeful,” Aurangzeb said. “PIA is now a very good proposition for investors.”
If completed, the deal would mark Pakistan’s first major privatization in nearly 20 years, following a failed attempt last year.
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