ADB Approves $800M Program to Boost Pakistan's Fiscal Reforms and Stability

The Asian Development Bank (ADB) has approved a comprehensive $800 million financial package aimed at strengthening Pakistan’s fiscal sustainability and modernizing its public financial management systems. The initiative, titled the Improved Resource Mobilization and Utilization Reform Program (IRMURP), Subprogram 2, combines a $300 million policy-based loan with ADB’s first-ever policy-based guarantee of up to $500 million. The latter is expected to unlock an additional $1 billion in financing from global commercial banks, demonstrating international confidence in Pakistan’s economic reform trajectory.

Focus on Structural Reforms for Long-Term Stability

The new program builds on the progress Pakistan has made in stabilizing its macroeconomic environment in recent years. ADB’s Country Director for Pakistan, Emma Fan, highlighted the significance of the support, stating, “Pakistan has made significant progress in improving macroeconomic conditions. This program backs the government’s commitment to further policy and institutional reforms that will strengthen public finances and promote sustainable growth.”

IRMURP Subprogram 2 supports a broad array of policy and institutional reforms to address key fiscal challenges. These reforms focus on:

• Tax policy and administration: Modernizing systems to increase tax compliance and expand the tax base.

• Expenditure and cash management: Enhancing fiscal discipline through efficient use of public resources.

• Digitalization of fiscal systems: Implementing new technologies for better transparency and efficiency in revenue collection and spending.

• Private sector development: Facilitating investment and reducing regulatory hurdles to encourage business growth.

The ultimate goal is to reduce Pakistan’s fiscal deficit and public debt, create fiscal space for social investments, and promote a sustainable growth path driven by private sector activity.

Groundwork for a Resilient Fiscal Future

The program is part of a multi-tiered support package and is reinforced through extensive technical assistance and coordination with key development partners, including the International Monetary Fund (IMF) and the World Bank. It aims to establish a robust institutional framework capable of maintaining long-term fiscal discipline, while also responding to external economic shocks with greater agility.

Pakistan’s fiscal challenges have been compounded by global economic pressures, climate-related disasters, and structural weaknesses in revenue mobilization. ADB’s support will help the government implement more efficient, equitable, and growth-friendly tax systems while also improving how funds are allocated and tracked.

Legacy of Support: ADB and Pakistan

Pakistan, a founding member of ADB, has maintained a long-standing partnership with the bank. Since 1966, ADB has committed more than $52 billion in loans, grants, and technical assistance to the country. These funds have supported critical development sectors such as energy, transport, agriculture, infrastructure, education, and social protection.

This latest funding marks a new chapter in Pakistan’s reform journey, signaling strong regional and global backing for policies aimed at structural transformation.

About the ADB

Founded in 1966 and headquartered in Manila, the Asian Development Bank works to promote prosperity, inclusivity, resilience, and sustainability across Asia and the Pacific. It is owned by 69 members—50 from within the region—and engages with governments and private sector entities to address some of the region’s most pressing development challenges. ADB uses innovative financial tools, partnerships, and policy support to drive measurable change in its member countries.

The IRMURP Subprogram 2 stands as a model of ADB’s evolving toolkit—pairing traditional development lending with innovative financial guarantees—to catalyze private financing and accelerate reform efforts in developing nations.