Pakistan, IMF reaches staff-level agreement on $7bn bailout deal

ISLAMABAD: In much-needed respite, cash-strapped Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement on a three-year Extended Fund Facility Arrangement (EFF) of about US$7 billion, the Washington-based international lender said on late Friday.

The staff-level agreement, which needs to be validated by the Fund’s Executive Board, aims to support the country’s efforts to cement macroeconomic stability and create conditions for stronger, more inclusive, and resilient growth, IMF said in a statement.

This includes steps to strengthen fiscal and monetary policy and reforms to broaden the tax base, improve State Owned Enterprises (SOE) management, strengthen competition, secure a level playing field for investment, enhance human capital, and scale up social protection through increased generosity and coverage in the Benazir Income Support Program (BISP).

In response to a request by Pakistan, the IMF team led by Nathan Porter, IMF’s Mission Chief to Pakistan, held discussions during the May 13-23, 2024 staff visit to Islamabad and virtually thereafter on IMF support for Pakistan’s medium-term policy and reform plans.

The program under the 2023 Stand-By Agreement (SBA) aims to capitalize on the hard-won macroeconomic stability achieved over the past year by furthering efforts to strengthen public finances, reduce inflation, rebuild external buffers, and remove economic distortions to spur private sector-led growth, IMF’s Mission Chief to Pakistan said in a statement.