ISLAMABAD: IMF Managing Director Kristalina Georgieva has announced that the second tranche of $3 billion under the Standby Arrangement (SBA) with Pakistan is expected to be signed this week.
According to a report from the foreign broadcasting organization Bloomberg, progress in the agreement may open up avenues for providing more funds to the South Asian country.
During an interview with Bloomberg Television in Singapore, Kristalina Georgieva expressed her anticipation for an agreement to be reached after the completion of the review within this week. She added that Pakistani officials are particularly crucial in adhering to the stringent IMF program, noting that the finance minister deserves praise.
When asked about the obstacles hindering the issuance of installments, she highlighted the country’s primary issue: a decrease in tax collection.
She emphasized that presently the country only collects 12 percent of its GDP in taxes, stating that tax collection should ideally be at least 15 percent to sustain economic activities.
Kristalina Georgieva recommended to the government that taxes should be collected from those capable of paying in Pakistan.
It is noteworthy that this confirmation by the top IMF official represents the IMF’s commitment to Pakistan under the Special Investment Facilitation Council (SIFC) to avoid creating or distorting a group of preferred investors in the country and ensuring transparency in its business dealings, following advice for ensuring accountability.
The IMF Executive Board approved a 9-month standby arrangement program for Pakistan in July, with $1.2 billion disbursed immediately after approval.
Pakistan is set to receive the second tranche of $710 million early next month pending the Executive Board’s approval upon successful completion of the second-quarter review.
Policy-Level Talks and Conclusion Expectations ;
The IMF technical staff commenced a review of the short-term loan agreement on November 2, concluding on November 10.
Informed sources informed Dawn that the IMF and Pakistani officials covered most areas during the policy-level talks, with objections remaining on a single point.
Reports indicate that the two sides exchanged successive details to finalize the Memorandum of Economic and Fiscal Policies (MEFP) yesterday, and the talks are expected to reach a positive conclusion today.