IMF, Pakistan reach staff-level agreement for release of $1.1b loan tranche
By
March 20, 2024
The International Monetary Fund (IMF) announced a big step forward on Wednesday: Pakistan has reached an agreement with them to receive the last portion of a $1.1 billion loan. This is good news for Pakistan’s economy, as it shows improvement.
However, the IMF mentioned that although there’s progress, Pakistan’s economic growth is still slow, and inflation remains high. To address this, Pakistan will likely need to raise gas and electricity prices to manage its debt.
Additionally, Pakistan is considering another loan package with the IMF to tackle its economic challenges in the long term. Talks for this will start soon.
During the recent visit of an IMF team to Islamabad, led by Nathan Porter, discussions were held on Pakistan’s economic program supported by an IMF Stand-By Arrangement (SBA). This agreement is pending approval by the IMF’s Executive Board.
The IMF stressed the importance of Pakistan’s ongoing efforts to stabilize its economy. This includes meeting financial targets, broadening the tax base, and making sure energy tariffs cover costs without burdening vulnerable groups. Pakistan also aims to address inflation and ensure transparent currency operations.
The government is keen to work with the IMF on a new program to fix fiscal and external challenges, foster economic recovery, and promote inclusive growth.
