Pakistan, IMF reach staff-level agreement for USD 1.2 bn loan deal

Pakistan and the IMF on Wednesday reached a stafflevel agreement SLA on the countrys loan programmes paving the way for Islamabad to access USD 12 billion pending approval from the global lenders boardThe Washingtonbased International Monetary Fund IMF will provide Pakistan with USD 1 billion under its Extended Fund Facility EFF and USD 200 million under its Resilience and Sustainability Facility RSF after approval from the funds boardLast week an IMF mission led by Iva Petrova concluded talks with Pakistani authorities on the second review of the EFF agreed in 2024 and the first review for the RSF climate loan agreed this year but it left Pakistan without signing a stafflevel agreementIn a statement issued early on Wednesday Petrova stated that the stafflevel agreement remained subject to approval by the IMF Executive BoardSupported by the EFF Pakistans economic programme is entrenching macroeconomic stability and rebuilding market confidence she saidThe recovery remains on track with the FY25 current account recording a surplus the first in 14 years the fiscal primary balance surpassing the programme target inflation remaining contained external buffers strengthening and financial conditions improving as sovereign spreads have narrowed significantly she saidHowever she added the recent floods had weighed on the countrys outlook particularly of the agriculture sector bringing down the projected FY26 gross domestic product GDP to about 32535 per centThe IMF official also noted progress on Pakistans policy priorities saying The authorities reaffirmed their commitment to the EFF and RSFsupported programmes and to maintaining sound and prudent macroeconomic policies while advancing ongoing structural reformsShe said that authorities remained committed to meeting the FY26 budget primary surplus of 16 per cent of GDP anchored in sustained efforts to mobilise revenue through tax policy and compliance measures and stand ready to take necessary actions should revenue shortfalls risk programme targetsAt the same time the authorities are assessing the flood damage and are providing urgent flood relief support in the affected provinces via reallocations in the provincial and federal budgets Petrova saidShe also said that efforts were underway to enhance revenue mobilisation broaden burdensharing between federal and provincial governments and strengthen public financial managementThe IMF official noted that the State Bank of Pakistan SBP was committed to a prudent monetary policy stance to ensure inflation remains durably within its target range of five to seven per centOn the issue of circular debt to the power sector she said that Pakistan remained committed to preventing its accumulation through timely tariff adjustments that ensure cost recovery and maintaining a progressive tariff structurePetrova added that the recent floods and those of 2022 had underscored the need for building Pakistans climate resilienceThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever