Stage set to bring Pakistan out of economic difficulty, says PM Shehbaz after IMF nod

Prime Minister Shehbaz Sharif applauded the efforts of the government after the International Monetary Fund (IMF) and Pakistani authorities reached a staff-level agreement. This paves the way for the disbursement of the next tranche, which is a positive development for the country.

The prime minister stated that the agreement has laid the foundations to bring Pakistan out of the economic hardships it is presently facing, including high inflation, diminishing foreign exchange reserves and the possibility of slower economic growth.

After the IMF and Pakistan authorities reached a staff-level agreement, the IMF released a statement saying that subject to Board approval, around $1,177 million would become available, bringing the total disbursements under the program to $4.2 billion.

IMF announces staff-level agreement with Pakistan

The development of the World Bank's loan came as a relief for Pakistan's policymakers as the incumbent government was actively pursuing the US-based lender to revive its stalled bailout programme.

Taking to Twitter, PM Shehbaz congratulated the ministries of finance and foreign affairs for their efforts in getting the IMF program revived.

https://twitter.com/CMShehbaz/status/1547466384845717506

“It was great teamwork,” said the prime minister. “The agreement with the Fund has set the stage to bring the country out of economic difficulties,” he added.

Finance Minister Miftah Ismail also hailed the development.

"We will soon receive $1.17b as the combined 7th & 8th tranche. I want to thank the PM, my fellow ministers, secretaries and especially the finance division for their help and efforts in obtaining this agreement," he said on Twitter.

https://twitter.com/MiftahIsmail/status/1547431451292905472

Intra-day update: Pakistan's rupee registers gain against US dollar after IMF news

The revival of Pakistan's economy through the IMF programme is highly necessary due to the nation's dwindling foreign exchange reserves. According to the State Bank of Pakistan, as of 30 June 2022, the country's reserves had decreased by $493 million to $9.82 billion. These expenses were attributed to external debt and other payments.

At the same time, a widening trade deficit, led by a high import bill, has dented the local currency.

Pakistan entered the current IMF programme in 2019, but only half the funds have been disbursed to date.