IMF disburses $1.23 billion tranche to Pakistan's account

Following its victory on the battlefield, Pakistan achieved another milestone on the economic front as the International Monetary Fund (IMF) disbursed a $1.23 billion tranche to the country’s account.

The global lender also confirmed the disbursement of the amount into the account of the State Bank of Pakistan, which is expected to raise Pakistan’s foreign exchange reserves.

The development came after the military conflict between Pakistan and India, sparked by the Pahalgam attack that pushed the two neighbouring countries into an escalation, with Pakistan emerging as the achiever.

The escalation had deep consequences on the economies of both countries, with the stock markets of both witnessing a bloodbath.

Read: Another blow to India as IMF approves $2.3b package for Pakistan

In contrast, despite India’s request to halt the disbursement of the tranche to Pakistan, the IMF’s Executive Board on May 9 approved more than $1 billion.

The IMF Executive Board issued a statement approving $2.4 billion for Pakistan from the $7 billion bailout programme, of which $1 billion was approved for the second tranche, while $1.23 billion was disbursed.

The statement said that $1.4 billion will be provided for climate change, while Pakistan will have to strictly implement reforms.

Read: IMF declines India’s request to reassess loans to Pakistan

According to the statement issued by the IMF, Pakistan has shown excellent performance in achieving economic targets, and it must ensure the collection of income tax on agricultural income from the next fiscal year.

It also added that Pakistan’s budget surplus should be $2.1 by June 30, and Pakistan’s foreign exchange reserves are expected to reach $13.9 billion by the end of the current fiscal year.