With an increased sum of $7 billion, Pakistan and the International Monetary Fund (IMF) have agreed to finish the combined 7th and 8th reviews of Pakistan’s Extended Fund Facility (EFF).
The combined seventh and eighth evaluations of Pakistan’s economic program supported by an IMF Extended Fund Facility (EFF) have been finished by an IMF team led by Nathan Porter.
According to a statement released by the IMF on Thursday, the agreement is pending approval by the IMF’s Executive Board.
The IMF statement reads, “Subject to Board approval, about $1,177 million (SDR 894 million) will become available, bringing total disbursements under the program to about $4.2 billion. Additionally, in order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board will consider an extension of the EFF until end-June 2023 and an augmentation of access by SDR 720 million that will bring the total access under the EFF to about US$7 billion.”
“Pakistan is at a challenging economic juncture. A difficult external environment combined with procyclical domestic policies fueled domestic demand to unsustainable levels. The resultant economic overheating led to large fiscal and external deficits in FY22, contributed to rising inflation, and eroded reserve buffers.”
The SLA for the combined seventh and eighth reviews, which is supported by the measures listed, will help build the conditions for sustainable and more equitable growth, according to the IMF.
Given the increased volatility in the global economy and financial markets, the authorities should nevertheless be prepared to take whatever further steps are required to achieve program objectives.
The IMF delegation expressed gratitude to the Pakistani government, business community, and development partners for their cooperation and fruitful conversations.
To read our blog on “Agreement with IMF has been secured, Finance Minister Miftah Ismail,” click here.
