Pakistan reaches staff-level agreement with IMF on revised programme

ISLAMABAD: The International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement to complete the combined 7th and 8th reviews of Pakistan’s Extended Fund Facility (EFF). 

The agreement is now pending approval by the IMF’s Executive Board, according to a statement issued by the IMF. Under the agreement, a loan disbursement of $1.177 billion will be released, bringing the total disbursements under the programme to $4.2 billion.

The IMF states that to meet the country’s higher financing requirements in the fiscal year 2022-23, the Executive Board will consider an extension of the EFF till the end of June 2023.

A major contributory to the agreement was the country’s compliance with the IMF Board in the form of raising fuel prices. Moreover, taxes on salaried individuals were also increased in order to satiate the global lender’s demands.

Announcing the agreement, Finance Minister Miftah Ismail thanked the Prime Minister, the Ministers, and the finance division for their stringent efforts in garnering this deal with the IMF. 

It is expected that this agreement will reduce the country’s looming default risk, help strengthen the rupee, and improve market conditions. However, a wave of inflation is also expected with the execution of this agreement.