The Pakistani authorities and International Monetary Fund staff have reached a staff-level agreement on policies and reforms needed to complete the first review under the EFF.
An International Monetary Fund (IMF) mission led by Ernesto Ramirez Rigo visited Islamabad from October 28 to November 8, 2019 to conduct discussions on the first review under the EEF. At the end of the visit, Mr. Ramirez Rigo made the following statement:
The agreement is subject to approval by IMF management and the Executive Board of Directors. Completion of the review will enable disbursement of SDR 328 million (or around US$ 450 million) and will help unlock significant funding from bilateral and multilateral partners.
The IMF’s press release reads, “Despite a difficult environment, program implementation has been good, and all performance criteria for end-September were met with comfortable margins. “Work continues towards completing the remaining structural benchmarks for end-September. Significant progress has been made in improving the AML/CFT framework, although additional work is needed before March 2020. International partners remain committed to supporting the authorities’ reform efforts, providing the necessary financing assurances”.
“On the macroeconomic front, signs that economic stability is gradually taking hold are steadily emerging. The external position is strengthening, underpinned by an orderly transition to a flexible, market-determined exchange rate by the State Bank of Pakistan (SBP) and a higher-than-expected increase in SBP’s net international reserves”.
“Budgetary revenue collections are growing on the back of efforts on tax administration and policy changes, and despite the ongoing compression in import-related taxes. Inflation pressures are expected to recede soon, reflecting an appropriate monetary stance. Importantly, measures to strengthen the social safety net are being implemented, and development spending is been prioritized.”
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