Pakistan and the IMF signed a memorandum for USD 7 billion in the first instance to be disbursed over a period of the IMF, more than three years. This package is aimed at helping the functioning but currently financially unstable country to solve the problems that concern the nation’s economy.
“Following the economic stability of the 37 months stand-by arrangement which was given under the year 2023, the staff of the IMF and Pakistani authorities were able to come up with a staff board for 37 months Extended Fund Facility Arrangement of about seven Billion US dollars,” IMF said. This much-anticipated deal is still awaiting consideration and certification from the IMF Executive Board.
The Washington-based lender said that it envisages the new programme as helping Pakistan in its quest to build macroeconomic stability and establish the climate for sustained, balanced, and equitable growth. This includes steps towards consolidating fiscal and monetary strategies, expanding the tax net, better SOE governance, more competitive structures, investment fairness, human capital development, and social safety nets through greater BISP. This was further underlined by the IMF, where they noted that adequate and sustained financial support from both Pakistani development and bilateral partners for the programme’s deliverables as crucial.
An IMF team recently visited Islamabad and met Pakistani officials from May 13 to May 23, 2024, headed by Nathan Porter, who is the IMF’s Mission Chief for Pakistan.
The new programme for the year was to consolidate on the macroeconomic stability attained over the year through strengthening the public finance, which will help to lower inflation rates and to rebuild external balances without righting economic distortions with a view to supporting private sector led-growth. In this regard, Pakistan is now obliged to enhance tax collection and intends to achieve 1.5% of GDP in the following financial year, FY25 and cumulatively by 3% of GDP in the course of the programme.
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