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The International Monetary Fund (IMF) has reached a Staff-Level Agreement (SLA) with Pakistan on the final review of a $3 billion bailout, where the country will receive $1.1 billion after approval from the Fund\u2019s Executive Board, the lender said on Wednesday.<\/p>\n
The funds are the final tranche of a $3bn last-gasp rescue package Pakistan had secured last summer, which averted a sovereign debt default. Islamabad is also seeking another long-term bailout.<\/p>\n
\u201cThe agreement recognises the strong program implementation by the State Bank of Pakistan and the caretaker government in recent months, as well as the new government\u2019s intentions for ongoing policy and reform efforts to move Pakistan from stabilisation to a strong and sustainable recovery.<\/p>\n
\u201cGiven the timing of the Second Review mission, immediately following the formation of the new cabinet, we expect the review to be considered by the IMF\u2019s Board in late April,\u201d the Fund said in a statement on its website<\/a>.<\/p>\n Nathan Porter, the IMF mission chief in Pakistan, issued the following statement, \u201cPakistan\u2019s economic and financial position has improved in the months since the first review, with growth and confidence continuing to recover on the back of prudent policy management and the resumption of inflows from multilateral and bilateral partners.\u201d<\/p>\n However, he added that growth was \u201cexpected to be modest this year\u201d and that inflation remained well above target.<\/p>\n \u201cOngoing policy and reform efforts are required to address Pakistan\u2019s deep-seated economic vulnerabilities,\u201d he said, adding that new government \u201cis committed to continue policy efforts\u201d.<\/p>\n The statement added that the current government will continue its \u201cefforts towards broadening the tax base, and continue with the timely implementation of power and gas tariff adjustments to keep average tariffs consistent with cost recovery while protecting the vulnerable through the existing progressive tariff structures, thus avoiding any net circular debt accumulation\u201d.<\/p>\n Moreover, the statement said that the central bank remained \u201ccommitted to maintaining a prudent monetary policy to lower inflation and ensure exchange rate flexibility\u201d.<\/p>\n Following the statement, shares at the Pakistan Stock Exchange (PSX) climbed<\/a> up by 374 points.<\/p>\n A day earlier, Finance Minister Muhammad Aurangzeb and the IMF mission chief in Pakistan, Nathan Porter, led their respective teams at the final customary concluding session, sources told<\/a> Dawn<\/em>. Both sides remained tight-lipped because of IMF communication protocols.<\/p>\n Last year, the IMF Executive Board had approved<\/a> the nine-month arrangement 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 In November 2023, a SLA was reached<\/a> between the IMF staff and the country regarding the first review under Pakistan\u2019s SBA. This agreement was contingent upon approval by the IMF\u2019s Executive Board.<\/p>\n