IMF approves release of $700M in bailout funds for Pakistan

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The International Monetary Fund's executive board approved Thursday the release of $700 million of a $3 billion bailout for cash-strapped Pakistan, the finance ministry said.

The bailout is meant to enable Pakistan to emerge from one of the worst economic crises in its history.

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In a statement, the ministry said the IMF executive board approved the release of the $700 million installment after a first review of Pakistan’s economic reform program.

A large Pakistani flag is draped over the side of a building, Lahore, Pakistan, August 12, 2022. (ARIF ALI/AFP via Getty Images)

The release of the $700 million by the IMF will bring the total disbursements under the bailout to $1.9 billion so far.

Pakistan has been facing one of the worst economic crises in its history since 2022, when climate-induced flooding killed 1,739 people and caused $30 billion in losses to its economy. The situation was worsened last year when Pakistan went to the verge of defaulting on its foreign debt repayments because of a delay in the release of a key installment from the IMF bailout.

In June 2023, the IMF approved the $3 billion loan to Pakistan after the country agreed to slash subsidies and raise taxes to comply with the bailout term. The loan had been on hold since December 2022.

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The latest development comes ahead of next month's parliamentary elections. Caretaker Prime Minister Anwaar-ul-Haq Kakar is running day-to-day affairs of the government.