Business

‘Significant progress’ achieved in Pakistan loan talks: IMF

Published by

Staff Reporter

2 years ago

ISLAMABAD: An International Monetary Fund (IMF) mission and Pakistan have made significant progress toward reaching a staff-level agreement for an extended fund facility, the global lender said on Friday.

Led by IMF’s Mission Chief to Pakistan, Nathan Porter, the IMF team visited the federal capital to talk about Islamabad’s plans for a home-grown economic program that can receive support under the money lending institution’s Extended Fund Facility (EFF).

The visit was arranged by the IMF at the Pakistani government’s request.

“The mission and the authorities will continue policy discussions virtually over the coming days aiming to finalize discussions, including the financial support needed to underpin the authorities’ reform efforts from the IMF and Pakistan’s bilateral and multilateral partners,” according to a statement released by the IMF.

Pakistan is probably going to ask the IMF for further funding under the Resilience and Sustainability Trust in addition to requesting at least $6 billion under the new program.

The IMF had issued a warning prior to the talks, stating that there were still very large negative risks to the Pakistani economy.

The official stated that significant progress has been made by the IMF and the Pakistani authorities towards reaching a Staff Level Agreement (SLA) on a comprehensive economic policy and reform program that can be supported under an EFF.

This progress builds on the economic stabilization achieved through the successful completion of the 2023 Stand-by Arrangement.

Pakistan’s reform program seeks to transition the country from economic stabilization to robust, inclusive, and resilient growth.

The authorities intend to accomplish this by maintaining the strength of the public finances to lessen vulnerabilities, enhancing domestic revenue mobilization through fairer taxation while increasing spending on social protection, climate resilience, and human capital; ensuring the viability of the energy sector through reforms aimed at lowering the high cost of energy; advancing the goal of low and stable inflation through appropriate monetary and exchange rate policies; enhancing public service delivery through the restructuring and privatization of state-owned enterprises (SOEs); and encouraging the growth of the private sector by ensuring a level playing field for investment and more robust governance.

Porter also praised the Pakistani authorities, private sector, and development partners for fruitful discussions throughout this mission.

Staff Reporter