Pakistan and the International Monetary Fund have reached a staff-level agreement, with the provision of $1.21 billion subject to approval by the Fund’s Executive Board.
The IMF confirmed the agreement in a statement issued following economic review discussions with Pakistan. The statement said the Executive Board would approve the release of the funds.
According to the Fund, discussions covered the fourth review for the fifth instalment under the existing Extended Fund Facility (EFF) programme. Talks also addressed the third review under the climate-related Resilience and Sustainability Facility (RSF) programme.
The statement praised Pakistan’s efforts to achieve its economic targets, saying the IMF programme had helped bring economic stability and accelerate reforms.
The IMF said Pakistan would receive $200 million under the climate financing programme. It noted that the country’s economic performance remained strong despite difficult external conditions and that the government had managed the oil crisis effectively.
According to the statement, GDP growth reached 4% in the first half of the fiscal year, compared with 3.6% in the previous year.
The Fund said inflation was declining and returning to the State Bank of Pakistan’s target range. Pakistan also assured the IMF that it would increase allocations for education and healthcare.
The primary surplus is expected to reach 2% of GDP, the statement said. The IMF also confirmed that Article IV discussions with Pakistan had concluded successfully.
Pakistani government sources said the IMF programme was being implemented in full and the privatisation process was being accelerated.
The sources added that losses at electricity distribution companies were being reduced, while measures were underway to prevent further accumulation of circular debt in the gas sector.
