The International Monetary Fund said on Friday that it had reached a staff-level agreement with Pakistan on the first review under the $6 billion programme for the country.
On July 3, the IMF’s Executive Board approved a 39-month arrangement under its Extended Fund Facility for Pakistan, in order to support the government’s economic reform programme. Pakistan received the first IMF payment of $991.4 million on July 10.
Pakistan would get the remaining $5 billion in installments over the next three years. However, it is subject to tough economic reforms to put the country’s economy on the path of sustainable and balanced growth and increase its per capita income.
An IMF mission led by Ernesto Ramirez Rigo visited Islamabad from October 28 to November 8. It held discussions on the first review under the extended arrangement.
“The Pakistani authorities and IMF staff have reached a staff-level agreement on policies and reforms needed to complete the first review under the EFF. The agreement is subject to approval by IMF management and the Executive Board of Directors,” the IMF mission head said in a statement.
The completion of review will enable disbursement of around $450 million to Pakistan.
“Completion of the review will enable disbursement of SDR 328 million (or around US$ 450 million) and will help unlock significant funding from bilateral and multilateral partners,” the statement read.
It said that Pakistan met all performance criteria for end-September with comfortable margins and the country is heading towards meeting all structural benchmarks.
The government’s policies have started bearing fruit, helping reverse the buildup of vulnerabilities and restore economic stability, according to the IMF statement. The external and fiscal deficits are narrowing, inflation is expected to decline, and growth, although slow, remains positive.
However, the global lender said that sustaining sound policies and advancing structural reforms remain key priorities to enhance resilience and pave the way for stronger and sustainable growth in the country.