Pakistan Reaches Staff-Level Agreement with IMF

Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement following economic review talks.

The IMF said in a statement that the agreement will allow Pakistan to receive $1.21 billion, subject to approval by the IMF Executive Board.

The agreement covers the fourth review of Pakistan’s existing Extended Fund Facility (EFF) programme and the third review under the Resilience and Sustainability Facility (RSF) programme for climate-related financing.

The IMF said Pakistan made strong efforts to meet its economic targets. It added that the IMF programme has helped bring economic stability and speed up the reform process.

Under the climate financing programme, Pakistan will receive $200 million. The IMF said Pakistan’s economic performance remained strong despite difficult external conditions and praised the government for managing the oil crisis effectively.

The IMF said Pakistan’s GDP growth reached 4% during the first half of the fiscal year, compared with 3.6% last year. Inflation has also declined and is moving back toward the State Bank’s target.

Pakistan has also assured the IMF that it will increase spending on education and health. The primary surplus is expected to remain at 2% of GDP.

The IMF also said Article IV discussions with Pakistan have been successfully completed.

According to Pakistani government sources, the country is fully implementing the IMF programme. The privatisation programme is also being accelerated.

The government is working to reduce losses of power distribution companies and is taking steps to control the circular debt in the gas sector.