The International Monetary Fund (IMF) has stated that timely and decisive implementation of policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability.
The lender’s mission led by Nathan Porter visited Islamabad from January 31 – February 9. Discussions were held under the ninth review of the authorities’ program supported by the IMF Extended Fund Facility (EFF) arrangement. At the end of the visit, the Fund issued a short statement earlier today.
The IMF team said it welcomes the Prime Minister’s commitment to implement policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions.
Considerable progress was made during the mission on policy measures to address domestic and external imbalances. Key priorities include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods; allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector, it stated.
The lender stressed on the timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development.
“Virtual discussions will continue in the coming days to finalize the implementation details of these policies,” it concluded.
The lender’s statement comes after local media and an international news agency widely reported that the IMF and Pakistan had reached an agreement on reviving the bailout program. In any case, it may be some time before Pakistan can officially restart the IMF program. Pakistan would need to implement the measures outlined in the statement prior to the staff-level agreement.