IMF to Support Pakistan’s Indigenous Economic Recovery Program for Loan
Washington, D.C. – The International Monetary Fund (IMF) has announced its support for a domestically designed economic recovery program proposed by Pakistan in its bid to secure a new and more substantial loan.
Homegrown Program for Economic Stability
The IMF’s mission team, which visited Pakistan from May 13th to 23rd, held discussions with Pakistani authorities regarding the next phase of engagements for a new support program. According to Julie Kozack, IMF’s Director of Communications, significant progress has been made towards reaching a staff-level agreement on a “homegrown” program.
Completion of Previous Program and Request for Larger Loan
Pakistan recently completed its short-term Stand-By Arrangement (SbA) of $3 billion with the IMF, with the disbursement of $1.1 billion in April. Following this, Pakistan requested a larger, long-term Extended Fund Facility (EFF) to address economic and financial challenges and facilitate key reforms.
Privatization and Reform Agenda
Pakistan’s proposed economic recovery program includes plans for privatization of certain entities. The country has experienced significant economic instability and is seeking IMF assistance to stabilize its economy and implement crucial reforms.
IMF Support for Domestically Driven Program
The IMF’s support for Pakistan’s indigenous program is a departure from its previous approach of imposing conditions on loans. This shift reflects the IMF’s recognition of the importance of country-owned and driven solutions.
Substantial Progress Made in Negotiations
The IMF and Pakistani authorities continue to engage virtually to finalize the details of the new program. The findings of the mission team will be communicated in due course, and a staff-level agreement is expected to be reached soon.
Conclusion
The IMF’s endorsement of Pakistan’s homegrown economic recovery program is a positive step towards securing a new loan and supporting Pakistan’s efforts to address its economic challenges. The IMF’s willingness to back domestically driven programs signifies a shift in its approach, recognizing the importance of country ownership in economic recovery.