Pakistan Reader# 739, 6 April 2024
Dhriti Mukherjee
In Focus
On 6 April, Business Recorder reported that as per the Director of the Communications Department at IMF, Julie Kozack, the IMF is ready to engage in new programme discussions in the upcoming months to resolve Pakistan’s fiscal and external stability challenges and enable inclusive growth. Earlier on 19 March, IMF staff and Pakistani authorities reached a staff-level agreement on the final review under Pakistan’s Stand-By Arrangement (SBA), under which Pakistan will get USD 1.1 billion subject to the Board’s approval. This agreement, as per Kozack, recognized the strong programme implementation by the State Bank of Pakistan, the caretaker government, and the new government’s proposed policy reforms. She noted an improvement in Pakistan’s economic and financial situation since the completion of the first review and stated: “Growth and confidence are continuing to recover. And we will be releasing in the next weeks as part of our World Economic Outlook, our latest growth forecasts for Pakistan.” Kozack added that authorities expressed interest in a successor IMF-supported programme to resolve economic challenges, and the Fund officials stand ready to engage in discussions in the coming months.
On 3 April, an official from the IMF asserted that the IMF board will decide the release of its “last tranche” to Pakistan by the end of this month. According to Dawn, in July 2023, the IMF approved USD 3 billion in order to bolster the country’s economic situation. Following that on 20 March, both IMF and Pakistan reached a staff-level agreement on the final review of the approval, upon approval, Pakistan will be granted USD 1.1 billion. IMF’s Communication Director Julie Kozack, when asked about the fund talks with Pakistan said the executive board will finalise the tranche. On 04 March, while addressing the federal cabinet, PM Shehbaz Sharif said that the government is planning to avail ‘new programme’ with IMF.
On 30 March, Dawn reported that the IMF staff-level agreement (SLA) is anticipated to be reached by the end of the fiscal year (30 June), according to Finance Minister Muhammad Aurangzeb, who also noted that no final talks have yet taken place with the Fund. The finance minister stated that specifics of the agreement will be reviewed at the spring meetings and that he would be leading a group to Washington on 14 or 15 April. He made this announcement during an appearance at the Pakistan Stock Exchange (PSX) gong ceremony. Aurangzeb addressed the important topic of a new IMF program, stating that in his recent discussions with them, the Fund has been “very receptive” to a “larger and longer program.” He said: “There hasn’t been any final discussion or agreement with them, but it is our wish that by the time we wrap up this fiscal year, the SLA is reached.” “We need the Extended Fund Facility (EFF) to execute the structural reforms programme, with the key word being ‘execute’, and not being bogged down in debate,” he added. (Tahir Amin, “Talks on new program: IMF stands ready: Julie,” Business Recorder, 6 April 2024; “IMF to finalise release of final instalment this month,” Dawn, 5 April 2024; Fatima S Attarwala, “Aurangzeb eyes new IMF deal by end of June,” Dawn, 30 March 2024)
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