IMF okays $1.1bn loan tranche for Pakistan

The International Monetary Fund (IMF) has approved the release of tranche of $1.10 billion for Pakistan, saying that Islamabad should be run under the policy framework including advancing the reforms of government-owned enterprises.

In its statement, the IMF said that Pakistan has successfully completed the second review and that the country had taken a 9-month loan program July 2023 and made serious efforts to achieve the loan program targets.

The Fund further said that the inflation ratio has started to decrease in Pakistan and the economic growth rate is reaching two percent after the loan program. Pakistan’s net foreign exchange reserves have increased from $4.5 billion to $8 billion. The unemployment rate in the country in last fiscal year was 8.5 percent while this year it is expected to be 8 percent. Revenues and grants were 11.4 per cent of GDP during the last fiscal year while this year these can be 12.5 per cent.

According to the IMF, last fiscal year’s budget deficit was 7.8 per cent of GDP while current fiscal year’s budget deficit is likely to be 7.5 per cent. Last year, Pakistan’s current account deficit was 0.7 per cent of GDP while it can jump to 0.8 per cent this fiscal year.

The IMF called on Pakistan to speed up structural reforms to achieve strong and inclusive growth and take measures to protect the poor through Benazir Income Support Program and strengthen anti-corruption institutions.