Islamabad/Washington: The IMF has reached a staff-level agreement with cash-strapped Pakistan on the final review of a $3 billion bailout, paving the way for the release of the last $1.1 billion tranche from the lender.
The agreement is subject to the approval of the IMF’s Executive Board, the global lender said.
An International Monetary Fund (IMF) team, led by Nathan Porter, visited Islamabad from March 14-19 to hold discussions on the second review of Pakistan’s economic programme supported by an IMF.
The IMF Executive Board approved the $3 billion Stand-By Arrangement for Pakistan last year.
“The IMF team has reached a staff-level agreement with the Pakistani authorities on the second and final review of Pakistan’s stabilization program supported by the IMF’s $3 billion (SDR 2,250 million) SBA,” the Fund said.
“The agreement recognises the strong programme implementation by the State Bank of Pakistan and the caretaker government in recent months, as well as the new government’s intentions for ongoing policy and reform efforts to move Pakistan from stabilisation to a strong and sustainable recovery,” the IMF said in a statement.
Pakistan’s economic and financial positions have improved in the months since the first review, the global lender said but cautioned that the economic growth remains modest and its inflation was above the target level.
The IMF also said that Pakistan will further increase gas and electricity prices to keep the circular debt at the agreed level in this fiscal year.
“Given the timing of the Second Review mission, immediately following the formation of the new Cabinet, we expect the review to be considered by the IMF’s Board in late April,” the Fund said.
The IMF also announced that Pakistan has shown interest in taking a new medium-term bailout package and the discussions will begin in the coming months.
“The new government is committed to continue the policy efforts that started under the current SBA to entrench economic and financial stability for the remainder of this year,” the Fund said.
PTI
