NEW YORK/ISLAMABAD - International Monetary Fund (IMF) Managing Director Kristalina Georgieva has said that the new bailout package approved for Pakistan is aimed at assisting the government in economic recovery and reduction in inflation along with employment creation and inclusive growth.
“Very productive meeting with Pakistan PM @CMShehbaz! We discussed Pakistan’s new Fund-supported program helping ongoing recovery, disinflation, increased tax fairness, and reforms to create new jobs and inclusive growth,” said the top IMF official in a post on X while referring to her meeting with Prime Minister Shehbaz Sharif.
Her statement comes after the Executive Board of the Washington-based lender approved a $7 billion Extended Fund Facility (EFF).
The latest bailout, coming to Pakistan in the form of loans, follows a commitment by the government to implement reforms, including a major effort to broaden the country’s tax base — a measure reflected in the tax-heavy budget passed earlier this year by the incumbent administration.
Furthermore, IMF Pakistan Mission Chief Nathan Porter has confirmed that multiple friendly nations have given “significant financing assurances” to Islamabad linked to the bailout package which go beyond the agreement to roll over $12 billion in bilateral loans owed to these countries.
Meanwhile, the State Bank of Pakistan (SBP) said Friday that it received US$ 1026.9 million on Friday under the Extended Fund Facility (EFF) arrangement from International Monetary Fund (IMF).
“Following the approval of the IMF Executive Board of 37-month Extended Fund Facility amounting to US $7 billion, SBP has received the first tranche of SDR 760 million, equivalent to USD 1026.9 million, from the IMF today,” the central bank said in a press release.
These inflows will be reflected in SBP liquid reserves to be released on Thursday October 03, 2024, it added.
It is pertinent to mention that the IMF board approved the 37-month Extended Fund Facility (EFF) programme of $7 billion for Pakistan on Wednesday and had authorized the immediate release of the first tranche of about $1 billion.
The staff level agreement between Pakistan and IMF on the arrangement was reached in July this year.