IMF to release $500 million to Pakistan after executive board approval

Economy projected to expand by 1.5% in FY-2021 from -0.4% in FY2020

KARACHI: PakistanI authorities and the International Monetary Fund (IMF) have reached an agreement for a package that would release $500 million to the country, following the second to fifth reviews of the authorities’ economic reform programme supported by the IMF Extended Fund Facility (EFF), a statement on Tuesday by the IMF said.

“Pending approval of the Executive Board, the reviews’ completion would release around $500 million, the statement said.

“The package strikes an appropriate balance between supporting the economy, ensuring debt sustainability, and advancing structural reform,” it added.

The Pakistani authorities remain committed to ambitious policy actions and structural reforms to strengthen economic resilience, advance sustainable growth, and achieve the EFF’s medium-term objectives,” the statement said.

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The policies and reforms implemented by the Pakistani authorities prior to the Covid-19 shock had started to reduce economic imbalances and set the conditions for improving economic performance. Most of the targets under the EFF-supported programme were on track to be met, it added.

The statement said that an IMF team held virtual discussions with Pakistani authorities and reached a staff-level agreement today.

The team, led by Mission Chief to Pakistan Ernesto Ramirez Rigo, visited Islamabad during February 3-13, to initiate discussions on the second review of the economic reform programme.

The IMF said that given these improvements, the economy is “projected to expand by 1.5 per cent in FY2021 from the -0.4 per cent in FY2020″.

But with the Covid-19 second wave still unfolding around the world, “the outlook is subject to a high level of uncertainty and downside risks”.

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