The Asian Development Bank (ADB) has approved a financial package of $ 800 million for Pakistan under the Resource Mobilization Reform Program (SUBGRAM-II).
According to the Ministry of Finance, the package includes $ 300 million. Political-based loan (PBL) and a $ 500 million Program -based warranty (PBG).
This significant development is the result of joint diplomatic efforts by the Ministry of Economic Affairs and the Ministry of Finance.
The initiative aims to improve domestic resource mobilization and stabilize the economy through economic reforms, the ministry officials said.
They added that support will help improve the tax system, increase revenue and promote fiscal discipline.
The program is also expected to expand the country’s income base and mark an important step towards financial confidence.
Read The ADB board meets on June 3rd to approve $ 800 million. Pakistan Package
According to Asian Development Outlook Annual Report 2025Pakistan’s real gross domestic product (GDP) is expected to grow by 2.5% in the financial year 2025 and maintain the same growth rate as in FY2024.
ADB projects that Pakistan’s growth will increase to 3.0% in FY20.
“Pakistan’s economy has benefited from improved macroeconomic stability through robust reform implementation in areas such as tax policy and the viability of the energy sector,” said Adb National Director of Pakistani Emma Fan.
“Growth is expected to continue in 2025 and rise in 2026. Sustained implementation of political reforms is crucial to strengthening this growth track and consolidating fiscal and external buffers.”
Previously, ADB had postponed the approval of a $ 800 million financing package. For Pakistan for five days at the request of India, who sought time to evaluate the loan documents, which vulnerable deficiencies in the lender’s rulebook allowing such extensions.
The meeting was re -planned for June 3, added government officials.
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When contacted, financial affairs confirmed, dr. Kazim Niaz that the ADB board meeting was scheduled for May 28, but has been postponed for five days at the request of the Indian CEO.
The secretary said that any director can seek a one-time expansion on the date under the ADB rules and India gave the benefit of this rule.
ADB Country Office did not respond to a request for comment on the development.
The Indian step came after it could not block the approval of the second loan of $ 1 billion to another loan of the International Monetary Fund.
The postponement of ADB emphasizes that Pakistani representatives in the World Bank, the IMF, the Asian Infrastructure Investment Bank and ADB will have to use a proactive approach to protect the country’s financial interests.
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After facing defeat in the hands of the armed forces on the battlefield, India has begun to lobby against Islamabad’s financial interests.
The five-day postponement has not affected Pakistan’s external financing plans, and the money is expected to flow into the central bank’s accounts after the board’s approval on June 3.
Tensions between India and Pakistan escalated on April 22 after an attack in the Pahaldam area in Indian-othal occupied Jammu and Kashmir (IIOJK) killed 26 people. India accused Pakistan of the incident without providing evidence. Islamabad denied India’s claims and called for an independent probe.
India then suspended the 65-year-old Indus Waters Treaty, canceled Visa and closure of border crossings that led to Tit-For-Tate Measures from Pakistan.
The military commitment was further intensified with missile attacks on May 7, which targeted several cities in Punjab and Azad Jammu and Kashmir, followed by Pakistan Downing Indian Warplanes.
As hostilities rose, both countries launched military strikes where India hit Pakistani Airbases and Pakistanis that retaliate by damaging Indian missile storage sites and other strategic goals.
On May 10, the US-led diplomatic endeavor resulted in a ceasefire agreement, although both countries continue to participate in a war war.
