The Pakistan authorities and IMF have reached a staff-level agreement to complete the sixth review under the $6 billion Extended Fund Facility (EFF) Programme. The agreement was approved by the Executive Board after the implementation of pre-emptive measures on fiscal and institutional reforms. The completion of the review will help in unlocking the funding from bilateral and multilateral partners. The Programme aims to support Pakistan’s policies to help the economy and ensure macroeconomic and long-lasting growth that benefits all Pakistanis.
Pakistani authorities have continued to make satisfactory progress under the Extended Fund Facility (EFF) Programme. Pakistan is consistently making efforts for improving anti-money laundering and combating financing terrorism framework. The State Bank of Pakistan (SBP) has also taken the right steps by starting to reverse the accommodative monetary policy stance, strengthening some macroprudential measures to contain consumer credit growth, and providing forward guidance. Pakistan also changed its fiscal policy to target a small reduction of the primary deficit.
The IMF provides loans to member countries who experience an actual or potential balance of payments problem. IMF gives loans based on conditions such as a hike in energy tariffs, removal of energy subsidy, increase in taxation, privatization of public entities, and fiscal adjustments to the budget. The conditions help borrower countries to solve their Balance of Payments (BoP) problems. The measures are meant to serve as a form of insurance for the IMF, by ensuring that the imposed conditions on the borrowing country will be favorable enough for them to repay the loan and its interest by the due date.