Pakistani authorities have achieved a significant milestone by securing a staff-level agreement with the International Monetary Fund (IMF) concerning the final review of the $3 billion Stand-By Arrangement (SBA). The lender disclosed this development in a statement released on Wednesday.
According to the announcement, this agreement awaits approval by the IMF’s Executive Board. Upon approval, the remaining access under the SBA, amounting to US$1.1 billion, will be made available.
This development follows a visit to Islamabad by an IMF team, led by Nathan Porter, from March 14 to March 19, 2024. The purpose of the visit was to engage in discussions regarding the second review of Pakistan’s economic program supported by the IMF’s SBA.
In the statement, IMF Mission Chief Nathan Porter acknowledged Pakistan’s improved economic and financial position since the first review. He highlighted growth and confidence recovery due to prudent policy management and renewed inflows from multilateral and bilateral partners.
However, Porter noted that growth is expected to be modest this year, with inflation remaining above target. He emphasized the need for ongoing policy and reform efforts to address Pakistan’s economic vulnerabilities amid challenges posed by external and domestic financing needs.
Porter expressed confidence in the new government’s commitment to continue the policy efforts initiated under the current SBA, aiming to reinforce economic and financial stability for the remainder of the year.
The State Bank of Pakistan (SBP) remains dedicated to maintaining a prudent monetary policy to lower inflation and ensure exchange rate flexibility, the statement added.
Furthermore, the authorities expressed interest in a successor medium-term Fund-supported program to address Pakistan’s fiscal and external sustainability weaknesses, laying the foundations for strong, sustainable, and inclusive growth.
The IMF team extended gratitude to the Pakistani authorities, private sector, and development partners for their cooperation throughout the mission.
