ISLAMABAD (The Thursday Times) — The IMF board called Pakistan’s economic programme performance “exceptional” in closed-door discussions on 8 May 2026, and India’s attempt to block the third review did not prevail. The board cleared approximately $1.32 billion in fresh funding for Pakistan. The IMF’s own public statement described “significant progress,” but the account of what was said inside the boardroom reveals a stronger assessment of Pakistan’s economic recovery than was publicly disclosed, according to officials with direct knowledge of the board meeting cited by the Express Tribune.
The IMF board meeting took place on 8 May 2026. Pakistan will receive approximately $1.1 billion under the Extended Fund Facility and $220 million under the Resilience and Sustainability Facility, bringing total disbursements under the two ongoing programmes to approximately $4.8 billion, the IMF confirmed in its official statement.
In its own published statement, the IMF said Pakistan’s policy efforts had “delivered significant progress in stabilising the economy and rebuilding confidence amid a challenging global environment.” Officials cited by the Express Tribune said one board director called the 8 May meeting one of the best for Pakistan, with almost all members appreciative of Pakistan’s progress.
What the IMF confirmed
The IMF’s official press release confirmed strong fiscal performance, with a primary surplus of 1.6 percent of GDP expected to be achieved in the current financial year, in line with programme targets. Gross reserves stood at $16 billion at end-December 2025, up from $14.5 billion at end-June 2025, and are projected to continue to be rebuilt over the coming year. The State Bank of Pakistan acted proactively to maintain an appropriately tight monetary policy stance, the IMF added.
Pakistan met all core programme conditions and most indicative targets. The IMF noted a shortfall in tax revenues collected by the Federal Board of Revenue and highlighted the need to address a narrow tax base and rising poverty. Some progress was made on structural benchmarks for the July to December 2025 review period.
“Pakistan’s policy efforts under the EFF arrangement have delivered significant progress in stabilising the economy and rebuilding confidence amid a challenging global environment.” IMF official statement · 8 May 2026
India’s objection rejected
India raised objections during the board meeting, claiming that Pakistan’s IMF loan proceeds were being used for defence purposes, according to officials cited by the Express Tribune. The board did not agree with that characterisation. India had previously attempted to block approval of a $1 billion loan tranche last year following the limited military confrontation between the two countries. On that occasion as well, the board proceeded with the disbursement. No evidence was provided by India to substantiate the claim at either board meeting, according to the officials cited.
What this means for Pakistan
The IMF board’s assessment comes at a moment when Pakistan’s economic standing is shifting in ways that would have seemed unlikely two years ago. The country’s foreign exchange reserves have more than doubled since the crisis lows of 2023. Inflation has fallen sharply from its peak. The Pakistani rupee has stabilised and, as The Thursday Times has reported, has outperformed the Indian rupee over the past twelve months since Operation Sindoor. Read The Thursday Times’ full analysis of the rupee reversal here.
The IMF programme has come at a cost. Fuel price adjustments, tax expansion and fiscal consolidation have squeezed household incomes and contributed to rising poverty, a concern the board flagged directly. The sustainability of the stabilisation will depend on whether Pakistan can broaden its tax base, complete structural reforms and attract private investment at scale. The board’s approval of the third review, and the $1.32 billion disbursement that follows, signals that the international community believes Pakistan is on the right track, even if the journey is not yet complete.
Sources: IMF official press release 8 May 2026 (imf.org), Express Tribune, 24 May 2026). The characterisation of Pakistan’s performance as “exceptional” and details of India’s objection are sourced from officials with direct knowledge of board discussions as reported by the Express Tribune. The IMF’s own published language describes “significant progress.”
