The Federal Government has reached an agreement with the International Monetary Fund (IMF) for a new agreement of $ 1.3 billion and also agreed the first review of the 37 -month rescue program, the Fund said on Tuesday.
Waiting for the approval of the Board, the government can unlock the $ 1.3 billion under a new program of climate resilience that covers 28 months.
It will also release $ 1 billion for the country under the rescue program of $ 7 billion, which would lead to those disbursements to $ 2 billion.
Pakistan had requested $ 1 billion of the IMF RSF and Sustainability Trust (RSF) in October. RSF financing is available to nations that commit to high quality reforms to generate resilience against climatic catastrophes through adaptation. You can pay more than 30 years, including a 10 -year grace, and is normally cheaper than the terms for an extended background installation (EFF), such as the loan program of $ 7 billion with Pakistan that is underway.
The program, secured in the middle of the year in 2024, has played a key role in stabilization of the economy and the government has said that the country is ongoing for a long -term recovery.
“In the last 18 months, Pakistan has progressed significantly in the restoration of macroeconomic stability and the reconstruction of trust despite a challenging global environment,” said the IMF in a statement.
“After approval (for the IMF Board), Pakistan will have access to approximately $ 1 billion under the EFF, which carries the total disbursements under the program to approximately $ 2 billion,” said the IMF.
It is likely that inflation remains stable in March, in the range of 1-1.5 percent, said the Ministry of Finance in its monthly economic perspective, after decreasing its lowest level in almost a decade of the previous month.
Inflation has been decreasing for several months, reaching 1.5 percent in February, after around 40 percent in May 2023.
The government says that the economy of $ 350 billion has stabilized under the rescue of the IMF of $ 7 billion that had helped avoid a default threat.
“While economic growth is still moderate, inflation has decreased to its lowest level since 2015, financial conditions have improved, sovereign differentials have been significantly reduced and external balances are stronger,” said the IMF on Pakistan.
The Government had been waiting for the IMF agreement on the first revision of the rescue and disbursement of $ 1 billion before the annual budget, generally submitted in June.
The IMF statement also pointed out what it called highly high risks, such as geopolitical clashes at basic products prices, harden global financial conditions or increased protectionism.
He said such risks could undermine “macroeconomic stability” with won effort. “
