IMF and Pakistan reach agreement; Islamabad to get $700m
By News Desk
November 15, 2023 09:49 PM
Pakistan and the International Monetary Fund (IMF) have reached an agreement for the release of the second tranche under the Standby Arrangement (SBA), 24NewsHD TV channel reported on Wednesday.
“Pakistan has met all the IMF targets. It has adjusted electricity and gas tariff prices in a timely manner,” the Fund said.
“Economic recovery under the IMF programme is ongoing and implementation of the federal budget has brought continuity in the policies,” IMF said.
The IMF staff and the Pakistani authorities reached a staff-level agreement on the first review under Pakistan’s Stand-By Arrangement (SBA), subject to approval by the IMF’s Executive Board. Upon approval, Pakistan will have access to $700 million
The agreement supports the authorities’ commitment to advance the planned fiscal consolidation, accelerate cost-reducing reforms in the energy sector, complete the return to a market-determined exchange rate, and pursue state-owned enterprise and governance reforms to attract investment and support job creation while continuing to strengthen social assistance.
In a statement, IMF team head Nathan Porter said: “The IMF team has reached a staff-level agreement (SLA) with the Pakistani authorities on the first review of their stabilisation programme supported by the IMF’s $3 billion
The statement added: “Anchored by the stabilization policies under the SBA, a nascent recovery is underway, buoyed by international partners’ support and signs of improved confidence.
“The steadfast execution of the FY24 budget, continued adjustment of energy prices, and renewed flows into the foreign exchange (FX) market have lessened fiscal and external pressures. Inflation is expected to decline over the coming months amid receding supply constraints and modest demand.
“However, Pakistan remains susceptible to significant external risks, including the intensification of geopolitical tensions, resurgent commodity prices, and the further tightening in global financial conditions. Efforts to build resilience need to continue.
“In this regard, strengthening macroeconomic sustainability and laying the conditions for balanced growth are key priorities under the SBA. The authorities’ policy priorities include:
“Continued fiscal consolidation to reduce public debt, while protecting development needs. The authorities are determined to achieve a primary surplus of at least 0.4 per cent of GDP in FY24, underpinned by federal and provincial government spending restraint and improved revenue performance supported, if necessary, by contingent measures. The authorities are building capacity to expand the tax base and raise revenue mobilization and are committed to improving the quality of public investment and spending.”