WASHINGTON, Nov 22 (APP):The International Monetary Fund (IMF) announced Monday that it has reached a staff-level agreement with Pakistan on policies and reforms needed to complete the sixth review under the $6 billion Extended Fund Facility (EFF), providing a major relief to the country’s economy.<\/p>\n
The agreement is subject to approval of the global lender’s Executive Board.
\nAccording to IMF’s concluding statement, completion of the review would make available about $1,059 million in special drawing rights (SDRs) to Pakistan, bringing total disbursements under the EFF to 3,027 million dollars.<\/p>\n
Acknowledging a \u201cdifficult environment,\u201d the IMF praised Pakistan\u2019s progress in implementing its EFF-supported programme.
\n\u201cAll quantitative performance criteria for end-June were met with wide margins, except for that on the primary budget deficit,” the statement said.<\/p>\n
“Notable achievements on the structural front include the finalization of the National Socio-Economic Registry update, parliamentary adoption of the National Electric Power Regulatory Authority (NEPRA) Act amendments, notification of all pending quarterly power tariff adjustments, and payment of the first tranche of outstanding arrears to independent power producers to unlock lower capacity payments fixed in renegotiated power purchase agreements,\u201d it said, adding that progress to curb terror financing and combat money laundering had also been noted.<\/p>\n
\u201cAvailable data suggests that a strong economic recovery has gained hold, benefiting from the authorities\u2019 multifaceted policy response to the COVID-19 pandemic that has helped contain its human and macroeconomic ramifications,\u201d said the global lender, praising the Federal Board of Revenue (FBR)\u2019s tax revenue collection.<\/p>\n
However, it added, \u201cexternal pressures\u201d had increased the current account deficit and caused rupee depreciation due to \u201cstronger economic activity, an expansionary macroeconomic policy mix, and higher international commodity prices.\u201d<\/p>\n
The IMF said that in a bid to counter such pressures, the government had started to gradually ease coronavirus-related stimulus measures.
\n\u201cThe State Bank of Pakistan has also taken the right steps by starting to reverse the accommodative monetary policy stance, strengthening some macroprudential measures to contain consumer credit growth, and providing forward guidance,\u201d it said, adding that government was also planning to introduce fiscal measures to reduce the primary deficit.<\/p>\n
The government\u2019s policies, according to IMF, would help safeguard the positive near-term outlook and allow Pakistan\u2019s economic growth to achieve or exceed 4 percent in the current fiscal year and 4.5% in FY23.
\nIt said that while inflation remained high, it should \u201cstart to see a declining trend once the pass-through of rupee depreciation is absorbed, and temporary supply-side constraints and demand-side pressures dissipate.\u201d<\/p>\n
The statement added, “The IMF team is grateful to the Pakistani authorities for open and constructive discussions.”<\/p>\n","protected":false},"excerpt":{"rendered":"
WASHINGTON, Nov 22 (APP):The International Monetary Fund (IMF) announced Monday that it has reached a staff-level agreement with Pakistan on policies and reforms needed to complete the sixth review under the $6 billion Extended Fund Facility (EFF), providing a major relief to the country’s economy. […]<\/p>\n
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