IMF Agreement Reached | Editorial

IMF Agreement Reached | Editorial

After much speculation and delays, it was announced on Thursday that Pakistan has completed a staff-level agreement with the IMF on the completion of two outstanding programme reviews and increased the total loan size to $7 billion. The deal was finalised after Pakistan agreed to the IMF’s demand that the country achieve a primary budget surplus of Rs152 to revive the bailout package.

According to reports, the IMF has stated that Islamabad should be prepared to take any additional measures going forward such as increasing revenue targets or slashing expenditures, excluding that on development. Regardless of these caveats, the government has done a commendable job of reviving the IMF program in a relatively short span of time considering the political capital that was at stake along with other external stressors.

The agreement is now subject to approval by the IMF’s Executive Board and once it is approved by the board, about $1.177 billion worth of loan tranche will be released. This announcement is surely going to bring in some semblance of stability and certainty about the economic path going forward, and we must make sure that we do everything required to complete the program in a satisfactory manner. We will have to ensure a steadfast implementation of the budget is a critical element for the continuation of the program. Seeing through these tough but necessary reforms will help reduce the government’s borrowing needs going forward.

The country finds itself at an incredibly challenging economic juncture as a result of gross management across multiple governments. Therefore, it is imperative that we ensure the steadfast implementation of the outlined policies that will help us create the conditions for sustainable and more inclusive growth going forward. As PM Shahbaz Sharif has rightly said, we must look to ensure that this is the last time we look towards the IMF for assistance. We should not find ourselves in a position where we are celebrating an IMF agreement, but to get there a lot of serious work needs to be done in the coming years.

IMF Agreement Reached | Editorial


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