IMF unlocks $1.2b after govt revisits pre-flood pledges | The Express Tribune
Key Takeaways
- IMF reached a staff-level agreement with Pakistan for the release of $1.2 billion in loan tranches.
- The agreement requires Pakistan to maintain the pre-flood primary budget surplus target of 1.6% of GDP.
- Pakistan committed to officially publishing the Governance and Corruption Diagnosis assessment report by mid-November.
- The funds will be disbursed under the EFF ($1 billion) and RSF ($200 million) programs, pending Executive Board approval.
- The deal aims to cement positive market sentiments and ensure the continuity of Pakistan's fragile economic stability.
The IMF has reached a staff-level agreement with Pakistani authorities for the second review under the Extended Fund Facility (EFF) and the first review under the Resilience and Sustainability Facility (RSF), unlocking $1.2 billion in funding. This breakthrough followed three weeks of negotiations where Pakistan agreed to stick to the pre-flood primary budget surplus target of 1.6% of GDP, despite requesting a relaxation due to extensive flood damages. Furthermore, Pakistan committed to officially releasing the Governance and Corruption Diagnosis assessment report by November 15th, which was a prior action for the board review. The agreement, subject to IMF Executive Board approval, will inject approximately $1 billion under EFF and $200 million under RSF, cementing positive market sentiment. Pakistani authorities reaffirmed their commitment to prudent macroeconomic policies and noted they are prepared to take necessary actions to offset any revenue shortfalls, such as missing the first-quarter tax target by Rs198 billion.
