Islamabad: The International Monetary Fund (IMF) has said it has reached a staff-level agreement with the Pakistani authorities on reforms needed to complete the second review of the six billion dollar loan approved for the cash-strapped country to help its fragile economy.
In July last year, the IMF Executive Board approved a 39-month extended arrangement under the Extended Fund Facility (EFF) for Pakistan to support its economic reform programme. Pakistan's finance ministry approached the IMF in August 2018 for a bailout package when the Imran Khan government took over.
The agreement is subject to approval by the IMF management and consideration by its executive board, which is expected in early April. Completion of the review will enable disbursement of around USD 450 million, the IMF said.
The Pakistan authorities were tight-lipped over the policies and reforms needed to complete the second review but hinted that the two sides had agreed over the fact that some breathing space was required to absorb earlier shocks before further adjustment as higher than estimated inflation had put unexpected pressure on majority of the people, the report said.
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An official said it was also hoped that an ongoing ease in oil prices would create room for adjustment, a component of which could become part of the next year's budget. He said the full disclosure of agreed upon policy actions could be 'market sensitive' and should be left for appropriate time.
Normally, details regarding reviews of IMF-supported programmes are made public after the reviews are approved by the fund's executive board and staff reports are released. The executive board meeting due for early March has now been postponed for a month until early April.
On completion of staff level discussions between February 3 and 13 in Islamabad, the IMF mission had reported considerable progress to have been made in the last few months in advancing reforms and continuing with sound economic policies.
The USD 6 billion financial aid includes an immediate disbursement of USD 1 billion to help Pakistan address its balance of payment crisis. Prime Minister Khan had changed the entire economic team including the finance minister, chief of State Bank of Pakistan (SBP) and head of Federal Bureau of Revenue (FBR) under criticism for failure to improve the economy.
The latest deal is the 22nd bailout package since Pakistan became member of the IMF in 1950.
With inputs from PTI
