Pakistan, IMF reach staff-level agreement on new $7bn loan program
ISLAMABAD: A new staff-level loan agreement has been reached between Pakistan and the International Monetary Fund (IMF) on Saturday under which the country will receive $7 billion over 37 months. The agreement is subject to approval by the IMF Executive Board.
A statement issued by IMF’s Mission Chief to Pakistan Nathan Porter said, “The Pakistani authorities and the IMF team have reached a staff-level agreement on a comprehensive program endorsed by the federal and provincial governments, that could be supported by a 37-month Extended Fund Arrangement (EFF) in the amount equivalent to SDR 5,320 million (or about US$7 billion at current exchange rates).”
It further said that the agreement was subject to approval by the International Monetary Fund’s Executive Board and timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.
According to the IMF statement, the program aims at capitalising on the hard-won macroeconomic stability achieved over the past year, by intensifying efforts to enhance public finances, curb inflation, rebuild external buffers, and eliminate economic distortions to promote private sector-led growth.
The authorities’ policy objectives include sustainable public finances, through a gradual fiscal consolidation based on reforms to broaden the tax base and remove exemptions, while increasing resources for critical development and social spending. In this regard, the authorities plan to increase tax revenues through measures of 1.5% of GDP in FY25 and 3% of GDP over the program.
Federal Finance Minister Muhammad Aurangzeb has expressed optimism about the newly agreed International Monetary Fund (IMF) program, emphasizing its potential to bring much-needed macroeconomic stability to Pakistan.
Addressing the media after the conclusion of discussions with the IMF team, Finance Minister Aurangzeb underscored the significance of the comprehensive 37-month Extended Fund Arrangement (EFF), which promises to support Pakistan with $7 billion.
The agreement, which is pending approval by the IMF’s Executive Board, aims to capitalize on the macroeconomic stability Pakistan has achieved over the past year.
Prime Minister Shehbaz Sharif has said that Pakistan needed to embark on a “long and difficult journey” to prevent knocking at the doors of the International Monetary Fund (IMF) again.
“If we want to get rid of loans, we need to consider this IMF program as the final one,” he said.
Addressing a meeting at the headquarters of the Federal Board of Revenue (FBR), the prime minister congratulated Finance Minister Muhammad Aurangzeb and other cabinet members for clinching the program. “Now is the time, it is our responsibility to act speedily and work tirelessly. Only then will this be the final IMF program in this country,” Shehbaz Sharif said. – Special Correspondent / News Agencies
