IMF Progress | Editorial
There is still some time to go till Pakistan gets executive approval from the International Monetary Fund on the disbursement of the last tranche under the Stand-by Agreement (SBA). But after the staff-level agreement announced yesterday, chances are that the executive board will follow suit. The staff-level agreement will now bring more market certainty and even more confidence within the government to pursue a medium or long-term plan with the IMF, in the coming months.
It is expected that a new plan will come with a different set of terms and conditions. Speaking of which, the government must proceed with an early deliberation of the possibility of structural changes in the economic system that might be required. The staff-level agreement has come as a sigh of relief and the government now has room to lay down the specifics of the program it intends to pursue with the IMF. In doing so, internal debate and disagreements can be ascertained before taking matters up for discussion with the lender.
It is safe to say that the period of haunting uncertainty has ended, but Pakistan is far away from achieving a stable economic outlook just yet. Just like the IMF indicates, inflation is still well above the target that was set. This is going to be the government’s biggest challenge. At a time when the IMF expects power and gas tariffs to be raised further to meet circular debt benchmarks, the government is definitely in a fix to balance between its welfare duty to the citizens and the requirements of the lending body.
So above all, the government, conjoined with the economic expertise in the country, must scratch its head and find a way to provide relief to people. The turbulent economic phase before the SBA has been chaotic for the consumer market and people have not been able to fall back on their own two feet following the wild price surge that came along with it. The government must find a way to control inflation and make life liveable for millions of Pakistanis.
IMF Progress | Editorial
Source: https://www.nation.com.pk/21-Mar-2024/imf-progress