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WASHINGTON: The Executive Board of the International Monetary Fund completed the second and final review of Pakistan’s economic reform program supported by the IMF’s Stand-By Arrangement (SBA).
The Board’s decision allows for an immediate disbursement of SDR 828 million (around $1.1 billion), bringing total disbursements under the arrangement to SDR 2.250 billion (about $3 billion).
Pakistan’s 9-month SBA, approved by the Executive Board on July 12, 2023, successfully provided a policy anchor to address domestic and external imbalances as well as a framework for financial support from multilateral and bilateral partners.
The IMF in its official statement said that macroeconomic conditions in Pakistan have improved over the course of the program. Growth of 2 percent is expected in FY24 given continued recovery in the second half of the fiscal year.
The fiscal position continues to strengthen with a primary surplus of 1.8 percent of GDP achieved in the first half of the fiscal year 2024, well ahead of projections and putting Pakistan on track to achieve its end-FY24 target primary surplus of 0.4 per cent of GDP.
Read more: IMF board approves $1.1bn loan tranche for Pakistan
Inflation, while still elevated, continues to decline, and, with appropriately tight, data-driven monetary policy maintained, is expected to reach around 20 percent by end-June.
The IMF in its official statement predicted Pakistan’s revenue collection and grants to remain at 12.5% of the GDP in FY2024 as compared to last year’s 11.4 per cent.
In FY2024, the deficit is expected to remain 7.5% of the GDP, which remained at 7.8 per cent in FY2023.
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