Pakistan tops IMF lending in region with $7.3bn facility

September 24, 2025 (MLN): Pakistan emerged as one of the largest recipients, securing 5,320 million SDR ($7.3 billion) under an Extended Fund Facility (EFF), according to The International Monetary Fund (IMF)'s Annual Report 2025, titled “Getting to Growth in an Age of Uncertainty.”

This indicates the country’s continued engagement with the Fund to address balance of payments pressures.

In the Middle East and Central Asia, other notable programs included Morocco’s 3,450m SDR Flexible Credit Line (FCL) and Egypt’s 1,000m SDR Resilience and Sustainability Facility (RSF), bringing the region’s total to 9,770m SDR.

In the Western Hemisphere, support reached 29,766.7m SDR, led by Argentina’s 15,267m SDR EFF, Chile’s 10,465.8m SDR FCL, and Ecuador’s 3,000m SDR EFF, while El Salvador received 1,033.9m SDR.

Sub-Saharan Africa also saw substantial financing amounting to 6,709.6 million SDR, with major allocations to Ethiopia (2,555.9m SDR, ECF), the Democratic Republic of the Congo (2,132m SDR combined under RSF and ECF), and Tanzania (596.7m SDR, RSF), alongside smaller programs in Kenya, Zambia, Madagascar, and others.

In the Asia and Pacific region, lending was more modest, with Papua New Guinea receiving 197.4m SDR under an RSF.

The report has also cautioned that the global economy faces a prolonged era of weak growth and mounting debt vulnerabilities. 

Managing Director Kristalina Georgieva highlighted that, while the global economy has shown resilience after successive shocks, the five-year growth outlook has stagnated at around 3%, well below the historical post-war average of 3.7%.

The Fund warned that nations are confronting a “low growth, high debt” trap that risks undermining both development and stability.

Global public debt surged past $100 trillion in 2024 and is projected to approach 100% of global GDP by the end of the decade, fueled by persistent fiscal deficits and growing interest costs .

The global fiscal deficit averaged 5.1% of GDP in 2024, with debt servicing crowding out critical spending in many countries.

Alarmingly, 53% of low-income developing countries and 23% of emerging market economies are already at high risk of debt distress.

The IMF urged swift but gradual fiscal adjustments, including reforms to pensions and energy subsidies, along with stricter spending rules to avoid disruptive corrections in the future .

The report also flagged growing vulnerabilities in global financial markets, citing tightening global financial conditions, elevated trade policy uncertainty, and excessive reliance on highly leveraged institutions.

With the United States now accounting for 55% of global equity markets, up from 30% two decades ago, asset valuations remain stretched, raising fears of sudden corrections .

The IMF warned that nonbank financial intermediaries, increasingly intertwined with traditional banks, could amplify market shocks, while sovereign-bank linkages pose additional systemic risks .

During FY2025, the IMF provided $63bn in financing to 20 countries, including about $9bn to 13 low-income nations, while also channelling $382 million into capacity development programs.

Recent success stories highlighted include Costa Rica, which combined an Extended Fund Facility with the Fund’s Resilience and Sustainability Facility, Jamaica’s reform-led recovery, and Somalia’s $4.5 billion debt relief milestone under the Heavily Indebted Poor Countries (HIPC) initiative .

Georgieva stressed that achieving sustainable growth requires both domestic reforms, such as digital transformation, labor market modernization, and tax system simplification, and stronger international cooperation to resolve trade tensions, restructure debt, and enhance financial safety nets .

“Times change, but we remain focused on our core mission: to help establish conditions for durable growth and financial stability. With the right policy choices, a better balanced, more sustainable and prosperous world is within reach,” Georgieva said.

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