Pakistan and the International Monetary Fund (IMF) have reached a significant milestone with a staff-level agreement on the second and final review under the Stand-By Arrangement. This agreement clears the path for the disbursement of the last $1.1 billion tranche from the IMF.
Nathan Porter, the leader of the IMF team that conducted talks in Islamabad from March 14-19, announced the achievement. He stated, “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 US$3 billion SBA approved in January 2024.” Porter emphasized that this agreement is contingent upon approval by the IMF’s Executive Board. Once approved, the remaining access under the SBA, totaling US$1.1 billion, will become available.
Porter acknowledged Pakistan’s improving economic and financial position since the first review, attributing it to prudent policy management and the resumption of inflows from multilateral and bilateral partners. However, he cautioned that economic growth is expected to remain modest in the ongoing financial year due to inflation persisting above target levels.
Highlighting the ongoing challenges faced by Pakistan, Porter stressed the necessity of implementing policies and reforms to address the country’s deep-seated economic vulnerabilities. He emphasized the importance of these measures amidst elevated external and domestic financing needs, as well as uncertainties in the external environment.
In essence, while Pakistan’s economic and financial conditions have shown signs of improvement, there is still work to be done to ensure sustained progress and stability in the face of ongoing challenges.
