Pakistan is committed to completing all prior actions before the International Monetary Fund (IMF) Board of Directors meeting for the approval of reviving the global lender’s $6 billion Extended Fund Facility (EFF).
The IMF Executive Board calendar updated on its website shows that its meeting has been scheduled for January 12, 2022, and the agenda includes, Pakistan – 2021 Article IV Consultation, Sixth Review under the Extended Arrangement, under the Extended Fund Facility, and Requests for Waivers of Nonobservance of Performance Criteria and Rephasing of Access.
Completion of the review would make available SDR 750 million (about $1,059 million), bringing total disbursements under the EFF to about $3,027 million.
Pakistan and IMF had reached a staff-level agreement on policies and reforms needed to complete the sixth review under the $6 billion Extended Fund Facility (EFF) and issued a press statement on November 21, 2021. The staff-level agreement is subject to approval by the Executive Board, following the implementation of prior actions, mainly on fiscal and institutional reforms.
The government has already tabled the Finance (Supplementary) Bill and the State Bank of Pakistan (SBP) Amendment Bill 2021 in the parliament as the prior conditions needed for the sixth review of the $6 billion Extended Fund Facility (EFF) to get cleared by the IMF’s executive board.
The government has committed to the IMF that Pakistan will complete all prior actions before the board of directors meeting to approve the revival of $6 billion EFF.
Under those prior actions, the government, through the supplementary finance bill will make a fiscal adjustment during the remaining part of the current fiscal year through a 22 percent cut in development funds, withdrawal of tax exemptions worth Rs. 343 billion, a revised tax target of Rs. 6.1 trillion, and an increase in petroleum levy on petroleum products by Rs. 4 per liter every month.
