ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have reached an agreement at the staff level regarding the first review of a $3 billion bailout package. Following approval by the IMF’s Executive Board, Pakistan is set to receive $700 million.
The IMF’s statement released on Wednesday confirmed that upon approval, Pakistan will gain access to approximately $700 million, totaling disbursements close to $1.9 billion under the program.
This agreement emphasizes the support for Pakistan’s commitment to progress in planned fiscal consolidation and hastening cost-reduction reforms in the energy sector, as stated by the IMF.
The short-term deal also outlines a return to a market-driven exchange rate, aiming for reforms in state-owned enterprises and governance to attract investments, foster job creation, and bolster social assistance measures.
The IMF’s statement highlighted, “A budding recovery is underway supported by stabilizing policies under the SBA, reinforced by international partners’ backing and improved confidence.”
The IMF further mentioned that the execution of the FY24 budget, ongoing adjustments in energy prices, and renewed inflows in the foreign exchange market have alleviated fiscal and external pressures.
While expecting a decline in inflation in the forthcoming months due to diminishing supply constraints and moderate demand, the IMF cautioned that Pakistan remains exposed to considerable external risks, including heightened geopolitical tensions, escalating commodity prices, and potential tightening in global financial conditions.
The IMF concluded by stressing the need for continued efforts to enhance resilience in the face of these challenges.