Pakistan Inches Closer To Final Review Of USD 3 Billion Bailout

Pakistan on Wednesday reached a staff-level agreement with International Monetary Fund on the final review of a USD 1.1 Billion after the fund’s executive board gave approval for the move.

The funds are part of the final tranche of the USD 3 billion last-gasp rescue package that Pakistan secured last summer, which averted a sovereign debt default for the crisis hit nation.

“The agreement recognizes the strong program implementation by the State Bank of Pakistan and the caretaker government in recent months, as well as the new government’s intentions for ongoing policy and reform efforts to move Pakistan from stabilization to a strong and sustainable recovery,” the Fund said in a statement.
“Given the timing of the Second Review mission, immediately following the formation of the new cabinet, we expect the review to be considered by the IMF’s Board in late April,” it added.

The IMF Mission chief in pakistan, Nathan Porter has said that Pakistan’s economic condition has improved since it received the first tranche of bailout amount. However, he added that growth was “expected to be modest this year” and that inflation remained well above target.

Porter further said ‘Ongoing policy and reform efforts are required to address Pakistan’s deep-seated economic vulnerabilities.’

Following the statement, shares at the Pakistan Stock Exchange climbed by 374 points. Last year, the IMF Executive Board approved the nine-month arrangement with Pakistan to support its economic stabilization programme. The approval had allowed for an immediate disbursement of USD 1.2 billion, with the rest to be phased over the programme’s duration, subject to two quarterly reviews.

Meanwhile, a spokesperson for the lender also confirmed that the IMF supported formulating a new economic programme for the country if the new government sought one.