Washington: International Monetary Fund Staff arrived on an agreement with Pakistan for a new $ 1.3 billion arrangement and also agreed to the first review of the ongoing 37 -month bailout program, the IMF said on Tuesday.
The IMF said in a statement, “In the last 18 months, Pakistan has made significant progress in restoring the macroeconomic stability and rebuilding faith despite a challenging global environment.”
Announcing its decision, the fund said in a statement that the new 28 -month deal would support Pakistan’s efforts for climate change.
Both new programs and loan reviews require approval from the Executive Board of the fund, which is largely a rubber-stamping exercise.
According to the country’s Finance Ministry in its monthly economic perspective, Pakistan’s inflation is expected to be stable in the 1% to 1.5% range in March. It follows a recession to its lowest level in nearly a decade of the previous month.
The IMF said, “Approval (by IMF Board), Pakistan will have approximately 1 billion dollars under EFF, the total recitation will reach about 2 billion dollars under the program.”
The Finance Minister of the country expressed optimism with the results of the policies that the government has executed as per the lender. “We are committed to staying in the course and continue to execute structural reforms in relation to taxation, energy and SOE, to put our country on the projection of permanent productivity and lead of exports,” Muhammad Aurangzeb said, speaking to China, Jio News.
After growing up to 40% in May 2023, inflation in the South Asian country has been falling to 1.5% in February for several months.
Pakistan says its $ 350 billion economy has stabilized under the $ 7 billion IMF bailout, which helped to stop a default.
The IMF said, “While economic growth remains moderate, inflation has decreased to its lowest level since 2015, financial conditions have improved, sovereign proliferation has decreased significantly, and external balances are strong.”
Islamabad was awaited the first review of the bailout before the country’s annual budget, usually presented in June and the IMF agreement on the $ 1 billion disbursement.
The IMF statement also mentions what “negative risks such as geopolitical shocks for commodity prices, global financial conditions, or increasing protectionism” what is called “negative risk risks.”
This warned that such risks can reduce Pakistan’s “hard-won macroeconomic stability”.
The IMF statement issued before today also stated that Pakistani officials are committed to pursue a gradual fiscal consolidation to continuously reduce public loans, “with tight monetary policy, cost-cutting measures and reforms, as they had principle in principle to the second review of the current 37-maheen program.
Nathan Porter, head of the IMF Mission, said in a statement, “In addition, climate -related risks continue a significant challenge for Pakistan, which creates a need to create flexibility through adaptation measures.”
“In this regard, the syllabus and the progress obtained in the last one and a half years, further strengthening public finance, ensuring price stability, rebuilding outer buffers and ending malformations in support of strong, inclusive and constant private sector leading development.”
“Program of officers supported by RSF is committed to: (i) strengthening public investment processes at all levels of the government that increase disaster flexibility, (ii) improving the efficiency of rare water resource usage through better pricing mechanisms; (v) promoting green mobility to reduce significant pollution and adverse health effects,” it was added.
