Pakistan, IMF reach deal for release of $1.1bn loan tranche

Author: Agencies

The International Monetary Fund (IMF) announced on Wednesday a staff-level agreement for the release of the last loan tranche of $1.1 billion and said Pakistan’s economic and financial positions have improved.

However, the global lender cautioned that economic growth remained modest and inflation was above target. The IMF also said Pakistan will further increase gas and electricity prices to keep circular debt at the agreed level during the current fiscal year.

The monetary fund also announced that Pakistan has shown interest in taking a new medium-term bailout package and discussions will begin in the coming months. An IMF team, led by Nathan Porter, visited Islamabad from March 14-19, 2024, to hold discussions on the second review of Pakistan’s economic program supported by an IMF Stand-By Arrangement (SBA), said the fund.

“The IMF team has reached a staff-level agreement with the Pakistani authorities on the second and final review of Pakistan’s stabilization program supported by the IMF’s $3 billion SBA, according to the IMF. This agreement is subject to approval by the IMF’s Executive Board, upon which the remaining access under the SBA, $1.1 billion will become available, added the statement from the fund.

“Pakistan’s economic and financial position has improved in the months since the first review, with growth and confidence continuing to recover on the back of prudent policy management and the resumption of inflows from multilateral and bilateral partners.”

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