The International Monetary Fund’s (IMF) Executive Board will meet on December 8 (Monday) to approve $1.2 billion in loans to Pakistan.

The IMF had reached a staff-level agreement with Pakistan on its loan programmes in October after extensive talks were held in Karachi, Islamabad and Washington from September 24 to October 8.

The agreement still requires approval from IMF’s Executive Board before funds can be released.

If approved, it would unlock about $1.2 billion in fresh financing for the country; roughly $1 billion under the Extended Fund Facility (EFF) and another $200 million under the Resilience and Sustainability Facility (RSF).

The IMF confirmed the date of the meeting in a brief announcement on Friday. The official calendar posted on the IMF website also showed the Executive Board would review Pakistan’s loan programmes.

Negotiations between Islamabad and the lending agency, led by IMF mission chief Iva Petrova, had focused on Pakistan’s fiscal performance, monetary stance, structural reforms and progress on climate-related commitments.

In its earlier assessment, the IMF noted that Pakistan had made “strong progress” in fiscal consolidation, reducing inflation and strengthening external buffers. It also acknowledged the State Bank of Pakistan’s (SBP) continued tight monetary policy, which has played a key role in anchoring inflation expectations.

Structural reforms — especially those related to state-owned enterprises, energy-sector viability, competition and public-service delivery — were cited as areas where the authorities had demonstrated continued commitment.

The Fund also pointed to advances under the RSF-supported climate agenda, including efforts to enhance resilience to natural disasters, strengthen water-resource management and improve the country’s climate-information systems.

These reforms have taken on greater urgency following recent floods that caused widespread damage to agriculture, infrastructure and livelihoods.

Approval of the reviews is widely expected to bolster investor confidence at a critical moment, as Pakistan continues to stabilise its economy amid external pressures and the lingering effects of flood damage.

Islamabad has been under sustained pressure to maintain fiscal discipline, accelerate energy-sector reforms and continue revenue-mobilisation measures to ensure longer-term stability.

The IMF has warned, however, that risks remain elevated. The economic outlook has been tempered by flood-related losses, and the Fund has emphasised that monetary policy must remain “appropriately tight and data-dependent” to keep inflation within the SBP’s target range.

It has also stressed the need for steady implementation of reforms to strengthen competition, enhance productivity, improve public services and reduce persistent vulnerabilities in the energy sector.

If the Board grants its approval on December 8, Pakistan could receive the disbursement as early as the following day.

Officials in Islamabad hope the inflow will reinforce external buffers, support economic recovery and signal continued international confidence in the government’s reform agenda.

Key report released ahead of meeting

Ahead of the meeting, the IMF released its long-awaited Governance and Corruption Diagnostic Assessment (GCDA), in which it highlighted persistent corruption challenges in Pakistan driven by systemic weaknesses across state institutions and demanded immediate initiation of a 15-point reform agenda to improve transparency, fairness and integrity.

The report, publication of which is a precondition for the IMF Executive Board’s approval of the loan programmes, estimated that Pakistan could boost economic growth by about 5 to 6.5 per cent over five years if it implements a package of governance reforms beginning within the next three to six months.

The report led to criticism of the government, and opposition parties called for a probe into the “worst financial scandal of Pakistan’s history”.

However, Finance Minister Muhammad Aurangzeb stated last week that the report was “not criticism” but a “catalyst for accelerating long-overdue reforms”.

He maintained that the report acknowledged significant progress in sectors including taxation and governance, and that many of its priority recommendations were “already work in progress”.

The finance minister further said the government was committed to implementing the remaining recommendations as part of broader institutional reforms essential to sustaining Pakistan’s economic turnaround.

ISLAMABAD: Short-term inflation, measured by the Sensitive Price Index (SPI), increased four per cent year-on-year in the week ending Dec 4, owing to an increase in the retail price of edible oil and wheat flour in the domestic market.

The SPI-based inflation has been on an upward trend for the past 18 consecutive weeks. A surge in the prices of perishable products, LPG cylinders, and electricity mainly drives the increase.

It, however, declined by 0.64pc from the previous week due to a slight dec­line in prices of tomatoes, potatoes and onions, official data showed on Friday.

The prices of tomatoes, onions, and potatoes rose sharply due to supply disruptions caused by the closure of the border with Afghanistan. The extraordinary spike in the retail prices of sugar and meat also contributed to fuel the short-term inflation.

The weekly inflation hit a record 48.35pc year-on-year in early May 2023, but then decelerated to 24.4pc in late August 2023 before surging past 40pc during the week ending Nov 16, 2023.

The items whose prices increased the most over the previous week included LPG (3.50pc), garlic (1.86pc), cooking oil 5 litre (1.54pc), eggs (0.81pc), bread (0.57pc), vegetable ghee 1 kg (0.40pc), powdered milk (0.36pc), bananas and wheat flour (0.28pc) each and cigarettes (0.25pc).

The items whose prices saw a decline week-on-week included tomatoes (30.11pc), onions (12.41pc), potatoes (6.92pc), chicken (4.46pc), sugar (3.31pc), diesel (1.67pc), pulse gram (1.55pc), pulse masoor (1.33pc), gur (1pc) and petrol (0.73pc).

However, on an annual basis, the items whose prices increased the most included sugar (37.49pc), gas charges for Q1 (29.85pc), wheat flour (17.50pc), gur (15.06pc), beef (13.47pc), firewood (12.59pc), bananas (11.06pc), powdered milk (9.03pc), diesel (8.42pc), lawn printed (8.29pc), cooking oil 5 litre (8.19pc) and vegetable ghee 2.5 kg (7.59pc).

In contrast, the prices of potatoes dropped 40.47pc, followed by garlic (38.51pc), tomatoes (31.51pc), onions (29.87pc), pulse gram (29.54pc), tea Lipton (17.79pc), pulse mash (13.82pc), electricity charges for Q1 (8.40pc) and salt powder (5.13pc).

Published in Dawn, December 6th, 2025

KARACHI: Buying at dips allowed the Pakistan Stock Exchange (PSX) to extend overnight recovery momentum in the weekend session, pushing the benchmark KSE 100 index to near 168,000 intraday as positive developments on the economic front kept investors in an enthusiastic mood.

Ali Najb, the Deputy Head of Trading at Arif Habib Ltd, stated that the market is currently in a consolidation phase, bolstered by significant developments. One key factor is the rollover of a $3 billion deposit from Saudi Arabia with the State Bank of Pakistan for an additional year, which has provided essential support to the external sector. Furthermore, media reports indicate that the president has approved the summary for the appointment of the Chief of Defence Forces, which helps to alleviate uncertainty on this front.

However, the index closed at 167,085.85 points, up 802 points, or 0.48 per cent, on Friday.

On the corporate front, Service Industries announced that its subsidiary, Service Long March Tyres (SLM), would raise capital through an Initial Public Offering and pursue listing on the PSX.

Market participation improved as trading volume rose 13pc to 687 million shares, while value surged 33.24pc to Rs41.6bn. Telecard Ltd topped the volume chart with 58 million shares.

Topline Securities Ltd said recovery was observed in the market, thanks to buying by local institutions, which came in to buy at the dip.

The top positive contributors to the index were Fauji Fertiliser, Pakistan Petroleum, Oil and Gas Development Company, Pakistan Services, Lucky Cement and Systems Ltd, which cumulatively contributed 607 points. Anal­ysts believe the market is likely to attempt to set an all-time high, with the energy sector likely to lead the rally in the sessions to come. This expectation is driven by market sentiment ahead of a potential circular debt disbursement next week, which could fuel fresh buying interest in key E&P and power sector stocks.

Published in Dawn, December 6th, 2025