ISLAMABAD (PEN) : The Asian Development Bank (ADB) has approved an \$800 million public finance support program for Pakistan, aimed at improving fiscal sustainability and strengthening public financial management amid ongoing economic reforms.
Key Financial Package for Reform
The “Improved Resource Mobilization and Utilization Reform Program (Subprogram 2)” comprises a \$300 million policy-based loan along with ADB’s first-ever policy-based guarantee of up to \$500 million. This guarantee is expected to unlock up to \$1 billion in additional financing from commercial banks.
“Pakistan has made significant progress in improving macroeconomic conditions,” said Emma Fan, ADB Country Director for Pakistan. “This program backs the government’s commitment to further policy and institutional reforms that will strengthen public finances and promote sustainable growth.”
Focus on Revenue and Reform
The program supports a wide array of reforms targeting tax policy, administration, and compliance, while also improving cash and public expenditure management. ADB highlighted that it will also help foster digitalisation, investment facilitation, and private sector engagement.
“These measures aim to reduce Pakistan’s fiscal deficit and public debt, while creating space for social and development spending,” ADB stated. The support initiative includes technical assistance and coordination with development partners to help Pakistan establish long-term fiscal resilience.
Government Response and Diplomacy
Adviser to the Finance Minister, Khurram Schehzad, hailed the development as a diplomatic achievement, crediting successful coordination by the Ministry of Finance and Ministry of Economic Affairs. “Diplomacy led by Economic Affairs and Ministry of Finance secures majority support at ADB Board,” he posted on X.
Broader Economic Outlook
This financial assistance comes as Pakistan continues its reform trajectory under multilateral oversight. ADB recently revised Pakistan’s GDP growth projection for fiscal year 2025 down to 2.5%, citing dependency on the success of structural reforms to maintain economic stability.
