IMF, Pakistan reach $1.1b staff-level agreement

The International Monetary Fund (IMF) has reached a staff-level agreement with Pakistan for a $1.1-billion disbursement to help the country address its balance of payment crisis, Reuters reported on Wednesday.

This agreement is part of a $3-billion rescue package secured last summer. The funds are pending approval by the IMF’s Executive Board, with a decision expected in April, the report said.

The agreement follows a review of Pakistan’s stabilisation programme, with the IMF noting improvements in the country’s economic and financial position, the report added.

However, Pakistan still faces challenges, including modest growth and high inflation. The IMF emphasised the need for further policy reforms to address economic vulnerabilities.

Pakistan’s Finance Minister has expressed interest in a new long-term bailout, with discussions on a medium-term program expected to begin soon.

The government is committed to meeting IMF conditions, including broadening the tax base and adjusting energy tariffs.

Economists anticipate that a new agreement with the IMF will involve additional conditions, focusing on structural reforms such as public sector spending.

Successful completion of the current program will enhance Pakistan’s chances of securing future support from the IMF.