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Pakistan

IMF’s $1.1bn tranche to help Pakistan’s economic stability, says PM Shehbaz Sharif

  • Islamabad is also already looking at securing a 24th bailout from the IMF
Published April 30, 2024
Photo: AFP
Photo: AFP

ISLAMABAD: The disbursement of $1.1 billion by the International Monetary Fund (IMF) will help Pakistan achieve greater economic stability, Prime Minister Shehbaz Sharif said on Tuesday, amid discussions for a new loan programme.

The funding was the second and final tranche of Pakistan’s $3-billion Stand-By Arrangement (SBA) with the IMF which it secured last summer to help avert a sovereign default.

“The disbursement will bring more economic stability in Pakistan,” PM Shehbaz said in a statement from his office, adding that the SBA was important in saving the South Asian nation from defaulting on its external liabilities.

The IMF’s executive board approved the final tranche on Monday.

The approval came a day after the premier discussed a new loan programme with IMF Managing Director Kristalina Georgieva on the sidelines of the World Economic Forum (WEF) in Riyadh.

The IMF appreciated Pakistan’s policy and fiscal measures to achieve the targets under the SBA.

“Macroeconomic conditions have improved over the course of the programme,” it said in a statement, adding that 2% growth was expected in the current fiscal year ending on June 30, given continued recovery in the second half.

It said the fiscal position continued to strengthen with a primary surplus of 1.8 percent of GDP achieved in the first half of the fiscal year, on track to achieve primary surplus of 0.4% of GDP.

Islamabad is seeking a new, larger long-term Extended Fund Facility (EFF) agreement with the IMF.

Pakistan’s Finance Minister Muhammad Aurangzeb has said Islamabad could secure a staff-level agreement on the new programme by early July.

Islamabad says it is seeking a loan over at least three years to help achieve macroeconomic stability and execute long-overdue and painful structural reforms.

Aurangzeb has declined to give details on the amount the country is seeking.

Islamabad is yet to make a formal request, but the Fund and the government are already in discussions. If secured, it would be Pakistan’s 24th IMF bailout.

The $350 billion economy faces a chronic balance of payments crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year - three-time more than its central bank’s foreign currency reserves.

Pakistan’s finance ministry expects the economy to grow by 2.6% in the fiscal year ending in June, while average inflation for the year is projected to stand at 24%, down from 29.2% the previous fiscal year.

The IMF said the inflation, while still elevated, continued to decline, and, with appropriately tight, data-driven monetary policy maintained, was expected to reach around 20% by end-June.

To move Pakistan from stabilization to a strong and sustainable recovery, authorities need to continue their policy and reform efforts, it added.

Comments

200 characters
sajid Apr 30, 2024 01:18pm
wao what an achievement we as a nation is so proud
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Usman Apr 30, 2024 03:06pm
Imf should have conditioned it to tax on rich and expensive petrol for the rich
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Builder Apr 30, 2024 03:41pm
And we will go on paying interest on these loans by siphoning blood from the poor by the very plan!
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Az_Iz Apr 30, 2024 04:37pm
It is not being sold as good news, like earlier governments.
thumb_up Recommended (0) reply Reply
Re=== Apr 30, 2024 06:09pm
Good job Please repeat. The only thing that any pak govt consistently achieves is secure loans. $1B? I mean seriously, this is not even a big amount to borrow!
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Yaqootmir Apr 30, 2024 09:33pm
Celebrating a measily USD. 1.1 Billion wow, talk about a colonial and slave mindset. when do we get rid of this stupid leadership PLEASE
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Doc Asad Apr 30, 2024 11:50pm
No stability until these clowns are ruling
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