Washington: The International Monetary Fund said on Tuesday that its Pakistani staff and authorities had entered into a staff level agreement, which will grant access to around 1 billion dollars under a prolonged funding agreement once approved.
“In the past 18 months, Pakistan has made significant progress in restoring macroeconomic stability and the reconstruction of confidence despite a difficult global environment,” the IMF said in a statement.
The new 28 -month agreement would support Pakistan’s efforts to mitigate and adapt to climate change, the fund said in the statement announcing its decision.
The new program and examination of loans require the approval of the Fund Executive Council, which is largely a rubber adaptation exercise.
Inflation of Pakistan should remain stable in March, in the range of 1% to 1.5%, according to the country’s finance ministry in its monthly economic prospects. This follows a slowdown in its lowest level in almost a decade the previous month.
“Upon approval (by the IMF board of directors), Pakistan will have access to around 1 billion dollars under the EFF, bringing total disbursements within the framework of the program to around $ 2 billion,” said the IMF.
The country’s finance minister expressed optimism with the results of the government that the government has performed in accordance with the lender. “We remain determined to keep the course and continue to perform structural reforms with regard to taxation, energy and public enterprises to put our country on the trajectory of sustainable productivity and growth exports,” said Muhammad Aurangzeb, the Minister of Finance, while speaking to Geo News from China.
Inflation in the Southern Asian country has dropped for several months, falling to 1.5% in February, after reaching around 40% in May 2023.
Pakistan maintains that its $ 350 billion economy stabilized under an IMF rescue of $ 7 billion, which has helped avoid a defect.
“Although economic growth remains moderate, inflation has decreased at its lowest level since 2015, financial conditions have improved, the sovereign differences have been considerably reduced and external sales are stronger,” said the IMF.
Islamabad awaited the IMF agreement on the first bailout examination and the disbursement of $ 1 billion before the country’s annual budget, generally presented in June.
The IMF Declaration also noted what it called upward risks such as “geopolitical shocks at raw material prices, the tightening of global financial conditions or the increase in protectionism”.
He warned that such risks could undermine the “hard macroeconomic stability of Pakistan” from Pakistan.
The IMF Declaration published earlier in the day also said that the Pakistani authorities remained “determined to advance progressive budgetary consolidation to durably reduce public debt”, as well as close monetary policy, cost reduction measures and reforms, as they have in principle agreed to the second examination of the 37 -month program.
“In addition, climate risks continue to pose an important challenge for Pakistan, creating a need to strengthen resilience, including through adaptation measures,” said IMF mission chief Nathan Porter, in the press release.
“In this regard, it is essential to keep the course and strengthen the progress made in recent years and a half, to strengthen resilience by further strengthening public finances, guaranteeing prices stability, rebuilding external buffers and eliminating distortions in favor of stronger, inclusive and sustained growth in the private sector.”