Second review of SBA with IMF to begin from March 14: Ministry of Finance

The second review of the Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) is scheduled to commence from March 14 to March 18, 2024 in Islamabad, said the Ministry of Finance in a statement on Wednesday.

“Pakistan has met all Structural Benchmarks, Qualitative Performance Criteria and Indicative Targets for successful completion of the IMF review,” the ministry added.

“This would be a final review of SBA, and staff-level agreement is expected after this appraisal,” it said.

“Once staff level agreement is reached, the final tranche of $1.1 billion will be disbursed, following the approval of Executive Board of IMF,” added the ministry.

Earlier, Reuters reported that the IMF mission would arrive in Pakistan on Wednesday for a second and last review of a $3-billion SBA.

Islamabad secured the last-minute package last summer to avert a sovereign default.

Prime Minister Shehbaz Sharif already directed his finance team, headed by newly-appointed Finance Minister Muhammad Aurangzeb, to initiate work on seeking an Extended Fund Facility (EFF) after the standby arrangement expires on April 11.

Aurangzeb had told reporters that the team was arriving this week, without mentioning a date. He also said the EFF would entail implications on the budget, therefore, the Fund input, indeed, would be needed.

Aurangzeb said his priority would be that preliminary talks are held on a blueprint (actions to be taken under the EFF) but the actual talks will be held with the Fund during the spring meeting.

Meanwhile, the lender has already said it is ready to formulate a medium-term programme if Islamabad applies for one.

Aurangzeb, who was picked over several other aspirants, including former four-time finance minister Ishaq Dar, has to bring stability to a country plagued by crippling boom-bust cycles that have in past led to nearly two dozen IMF bailout programmes.

The debt-ridden economy, which contracted 0.2% last year and is expected to grow around 2% this fiscal, has been under extreme stress with low reserves, a balance of payment crisis, inflation at 23%, policy interest rates at 22% and record local currency depreciation.