<\/p>\n
The International Monetary Fund (IMF) has reached a staff-level agreement with Pakistan on the first review of a $3 billion bailout, where the country will receive $700 million after approval from the Fund\u2019s Executive Board, the organisation said on Wednesday.<\/p>\n
In June, the IMF executive board had approved<\/a> the much-needed nine-month standby arrangement (SBA) with Pakistan \u201cto support its economic stabilisation programme\u201d. The approval had allowed for an immediate disbursement of $1.2bn, with the rest to be phased over the programme\u2019s duration \u2014 subject to two quarterly reviews.<\/p>\n The IMF\u2019s technical staff had initiated the first evaluation of the short-term loan agreement on Nov 2, which concluded on Nov 10.<\/p>\n In a statement<\/a>, the Fund said that a team led by Nathan Porter was in Islamabad to hold discussions on the first review of the SBA.<\/p>\n \u201cThe IMF team has reached a staff-level agreement with the Pakistani authorities on the first review of their stabilisation programme supported by the IMF\u2019s $3 billion SBA,\u201d Porter said.<\/p>\n \u201cThe agreement is subject to approval of the IMF\u2019s Executive Board. Upon approval, around $700m will become available bringing total disbursements under the programme to almost $1.9bn,\u201d he said.<\/p>\n \u201cAnchored by the stabilisation policies under the SBA, a nascent recovery is underway, buoyed by international partners\u2019 support and signs of improved confidence,\u201d Porter said.<\/p>\n He said that the steadfast execution of the FY24 budget, continued adjustment of energy prices, and renewed flows into the foreign exchange market had lessened fiscal and external pressures.<\/p>\n \u201cInflation is expected to decline over the coming months amid receding supply constraints and modest demand. However, Pakistan remains susceptible to significant external risks, including the intensification of geopolitical tensions, resurgent commodity prices, and the further tightening in global financial conditions. Efforts to build resilience need to continue,\u201d Porter said.<\/p>\n The IMF mission chief said that strengthening macroeconomic sustainability and laying the conditions for balanced growth were key priorities under the SBA.<\/p>\n The statement by the IMF was released hours after Porter and IMF Resident Representative for Pakistan Esther Perez Tuiz called on interim Prime Minister Anwaarul Haq Kakar.<\/p>\n A statement issued by the Prime Minister\u2019s Office said the two apprised Kakar about the \u201cstatus of the negotiations held at the technical levels with the team of government of Pakistan under the first review of the SBA\u201d.<\/p>\n According to the PMO, Porter acknowledged the efforts made by the government in meeting the various quarterly targets. Porter said that the efforts had resulted in the \u201cpositive conclusion of the technical-level talks\u201d. He said that both teams had extensive talks on various aspects of the SBA.<\/p>\n Porter also appreciated the role played by interim Finance Minister Shamshad Akhtar and her team and SBP Governor Jameel Ahmed in the talks.<\/p>\n PM Kakar thanked the IMF team for its ongoing work with Pakistan and praised the finance minister\u2019s leadership and the contribution of her team in taking the programme forward. He also appreciated the role of the SBP governor.<\/p>\n \u201cThe prime minister reaffirmed the government\u2019s enduring commitment to the reform efforts agreed with the IMF as these are aimed at stabilising Pakistan\u2019s economy in the long run,\u201d the statement reads.<\/p>\n It added that Akhtar, Ahmed, Federal Board of Revenue Chairman Malik Amjad Zubair Tiwana and senior government officials also attended the meeting.<\/p>\n Earlier today, IMF Managing Director Kristalina Georgieva had said the agreement for the release of the second tranche was expected this week.<\/p>\n Speaking to Bloomberg<\/em>, Georgieva said: \u201cThe Pakistani authorities, especially the finance minister deserve credit for a very difficult time sticking to the programme that they have.\u201d<\/p>\n When questioned about the obstacle affecting the release of the tranche, she pointed to the predominant issue in the country as \u201ctax collection\u201d.<\/p>\n \u201cThe country today collects 12 per cent tax-to-GDP. We are saying it has to be at least 15pc to help the revenues to sustain the functioning of your economy.\u201d<\/p>\n Georgieva recommended to the government, stating, \u201cFor the people in Pakistan that can pay taxes, collect it from them.\u201d<\/p>\n Meanwhile, Senator Raza Rabbani strongly condemned the global lender\u2019s recent communication with Pakistan\u2019s key partners over fund pledges.<\/p>\n\u2018Pakistani authorities deserve credit\u2019<\/h2>\n
Rabbani takes exception to IMF communication with key partners<\/h2>\n