IMF officials and Pakistani authorities have reached a staff-level agreement on economic policies and reforms, which will pave the way for approval of the next installment of $450 million loan for Islamabad in April this year.

According to a statement issued by Ernesto Ramirez Rigo, mission chief for Pakistan, on the second review of the Extended Fund Facility (EFF): "Following discussions between the International Monetary Fund (IMF) staff and the Pakistani authorities in Islamabad from February 3-13, which continued from the IMF headquarters in recent days, IMF staff and the Pakistani authorities have reached a staff-level agreement on policies and reforms needed to complete the second review of the authorities reform programme supported under the EFF. The agreement is subject to approval by the IMF management and consideration by the Executive Board, which is expected in early April. Completion of the review will enable disbursement of SDR 328 million (around US$450 million)."

The international money lender says a “considerable progress has been made in the last few months in advancing reforms and continuing with sound economic policies. All end-December performance criteria were met, and structural benchmarks have been completed. Steadfast progress on programme implementation will pave the way for the IMF Executive Board’s consideration of the review. In implementing the programme, development and social spending have been accelerated.”

An IMF mission, led by Ernesto Ramirez Rigo, visited Islamabad from February 3 to 13 to initiate discussions on the second review of the authorities’ economic reform programme supported under the Extended Fund Facility (EFF) arrangement. At the conclusion of the visit, Ramirez Rigo made the following statement:

“The IMF staff team had constructive and productive discussions with the Pakistani authorities and commended them on the considerable progress made during the last few months in advancing reforms and continuing with sound economic policies. The mission and the authorities made significant progress in the discussions on policies and reforms. In the coming days, progress will continue to pave the way for the IMF Executive Board’s consideration of the review.

“The macroeconomic outlook remains broadly as expected at the time of the first review. Economic activity has stabilized and remains on the path of gradual recovery. The current account deficit has declined, helped by the real exchange rate that is now broadly in line with fundamentals, while international reserves continue to rebuild at a pace considerably faster than anticipated. Inflation should start to see a declining trend as the pass-through of exchange rate depreciation has been absorbed and supply-side constraints appear to be temporary. Fiscal performance in the first half of the fiscal year remained strong, with the general government registering a primary surplus of 0.7 percent of GDP on the back of strong domestic tax revenue growth. Development and social spending have been accelerated.”