Pakistani authorities have reached a staff-level agreement with the International Monetary Fund (IMF) on the second and final review of the $3 billion Stand-By Arrangement (SBA), it was announced by the lender in a statement on Wednesday.
“This agreement is subject to approval by the IMF’s Executive Board, upon which the remaining access under the SBA, US$1.1 billion, will become available,” it added.
This development comes after the IMF team, led by Nathan Porter, visited Islamabad from March 14 to 19, 2024, to hold discussions on the second review of Pakistan’s economic programme supported by the IMF’s SBA.
The talks were extended until Tuesday because the agenda was not covered, and the remaining items were to be discussed on March 19, the Business Recorder reported earlier.
“Pakistan’s economic and financial position has improved in the months since the first review, with growth and confidence continuing to recover on the back of prudent policy management and the resumption of inflows from multilateral and bilateral partners,” IMF Mission Chief Nathan Porter was quoted as saying in the statement on Wednesday.
“However, growth is expected to be modest this year, and inflation remains well above target. Ongoing policy and reform efforts are required to address Pakistan’s deep-seated economic vulnerabilities amidst the ongoing challenges posed by elevated external and domestic financing needs and an unsettled external environment.”
Porter said the new government is committed to continuing the policy efforts that started under the current SBA to entrench economic and financial stability for the remainder of this year.
“In particular, authorities are determined to deliver the FY24 general government primary balance target of Rs401 billion (0.4 per cent of GDP), with further efforts towards broadening the tax base, and continue with the timely implementation of power and gas tariff adjustments to keep average tariffs consistent with cost recovery while protecting the vulnerable through the existing progressive tariff structures, thus avoiding any net circular debt (CD) accumulation in FY24.
