By Staff Reporter
ISLAMABAD: The Asian Development Bank (ADB) on Tuesday approved an $800 million program to strengthen fiscal sustainability and enhance public financial management in Pakistan, as the country pushes forward with economic reforms.
The package, dubbed the Improved Resource Mobilization and Utilization Reform Program, Subprogram 2, comprises a $300 million policy-based loan and a pioneering $500 million policy-based guarantee—the first of its kind from ADB. The 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 ADB Country Director for Pakistan Emma Fan. “This program backs the government’s commitment to further policy and institutional reforms that will strengthen public finances and promote sustainable growth.”
The initiative targets sweeping reforms to overhaul tax policy, administration, and compliance, while sharpening public expenditure and cash management systems. It also prioritizes digitalization, investment facilitation, and private sector growth. These steps aim to shrink Pakistan’s fiscal deficit and public debt, freeing up resources for social programs and development projects.
Backed by technical assistance and coordination with other development partners, the program seeks to cement long-term fiscal resilience and stability in Pakistan, which has grappled with economic challenges in recent years.
Pakistan, a founding member of the ADB since 1966, has tapped over $52 billion in loans, grants, and other financing from the bank over the decades. These funds have fueled inclusive growth, bolstered infrastructure, and shored up energy, food security, transport, and social services.
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