In a significant stride towards economic stability, the International Monetary Fund’s Executive Board is scheduled to review Pakistan’s first assessment on January 11 next year, potentially unlocking $700 million under the standby arrangement (SBA), as reported by Bloomberg. The positive evaluation follows Pakistan’s earlier staff-level agreement with the IMF under the $3 billion SBA, awaiting board approval for accessing the awaited second tranche.
Although Pakistan’s initial review was not included in the December 1-15 schedule of the IMF’s Executive Board meeting, recent reports clarify that this delay stems from necessary efforts by the IMF team to secure reconfirmation from multilateral and bilateral creditors, crucial for meeting the fiscal year’s financing requirements amounting to $24.9 billion.
Discussions among policymakers hint at the possibility of IMF talks for the second review occurring after the general elections and the new government’s takeover. Initially slated for discussions starting February 3, 2024, this might now be adjusted to late February or early March 2024, aligning with the potential February 8, 2024, election date. The current SBA program, set to expire on April 14, 2024, adds urgency to the positive momentum.
IMF Executive Director Bahador Bijani acknowledged overall economic improvement, commending Pakistani authorities during an event in Washington, emphasizing the country’s regional and global significance. Nathan Porter, IMF Mission Chief to Pakistan, expressed contentment with the recent staff-level agreement, praising the current government’s actions and policies as indicative of their commitment to stabilizing the nation.
Despite facing challenges such as rapid inflation in Asia, a looming dollar-denominated debt of about $1 billion next year, and scheduled February elections, Interim Finance Minister Shamshad Akhtar’s comments indicate resilience. Despite the staff-level deal, the country’s acknowledgment of potential fragility prompts consideration for an additional IMF loan to further support and fortify the economy.
Overall, these positive developments underscore the international community’s confidence in Pakistan’s economic trajectory, highlighting collaborative efforts between the government and global financial institutions to foster stability and growth.
