IMF deploys remaining $1.1B in Pakistan bailout funds

The International Monetary Fund on Monday approved the immediate release of the final $1.1 billion tranche of a $3 billion bailout to Pakistan, the global lender said in a statement.

Pakistan needs the money to overcome one of the worst economic crises in its history that had raised fears it could default on the payment of foreign debts.

As part of the bailout conditions, the government was required to reduce subsidies intended to cushion the impact of rising living costs. This contributed to an increase in prices, especially energy bills, and angered the public. Islamabad also imposed new taxes, another unpopular move.

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But an IMF official said the country’s "determined policy efforts" have brought progress in restoring economic stability.

Moderate growth has returned, external pressures have eased and, while still elevated, inflation has begun to decline, said Antoinette Sayeh, the IMF’s deputy managing director and chair, in the statement.

"Given the significant challenges ahead, Pakistan should capitalize on this hard‑won stability persevering — beyond the current arrangement — with sound macroeconomic policies and structural reforms to create stronger, inclusive and sustainable growth," Sayeh added.

Last month, Finance Minister Muhammad Aurangzeb said Pakistan planned to seek a long-term loan to help stabilize the economy after the end of the current bailout package.

He didn't provide a figure but officials have previously said they want another $8 billion from the IMF over three years.