The International Monetary Fund (IMF) will finalize this month the release of a final tranche of Pakistan’s $3 billion loan program, an IMF spokesperson said on Thursday.
Pakistan entered the $3 billion Stand-By Agreement (SBA) in June last year, which helped the South Asian country avert a default on its international debt obligations.
Last month, Pakistan and the IMF reached a staff-level agreement on the second and final review of the SBA, which is subject to approval by the IMF executive board and will help unlock $1.1 billion.
“Upon approval by the Board, Pakistan will have access to around $1.1 billion, and that would bring total disbursements under the SBA to about $3 billion,” IMF spokesperson Julie Kozack said at virtual briefing.
“We do expect the board meeting to take place in late April.”
Pakistan, which has faced significant financial challenges in recent years, has successfully carried out structural reforms under the short-term IMF bailout.
“Pakistan’s economic and financial improvement has improved in the months since the first review was completed. Growth and confidence are continuing to recover,” the IMF spokesperson said.
Navigating a tricky path to economic recovery, Islamabad now seeks a bigger loan from the international lending agency to effectively deal with its financial commitments during its five-year term.
Hours before the IMF briefing, Prime Minister Shehbaz Sharif acknowledged the terms of another long-term IMF loan would not be easy, reiterating it was important for the country to seek a fresh bailout facility to ensure macroeconomic stability.
“The [Pakistani] authorities have expressed interest in a successor IMF supported program with the aim of resolving Pakistan’s fiscal and external stability challenges and laying the foundation for inclusive growth,” Kozack added.
“And, of course, we stand ready to engage in program discussions in the coming months.”
