Pak govt, IMF reaches staff-level agreement

In a major relief to cash-strapped Pakistan, the government and the IMF have reached a long-awaited staff-level agreement to inject $3 billion into the ailing economy after months-long negotiations that pushed the country to the brink of default.

Pakistan and the Washington-based global lender reached an agreement on Thursday to support the authorities' immediate efforts to stabilise the economy from external shocks. Pakistan's economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet.

“I am pleased to announce that the IMF team has reached a staff-level agreement with the Pakistani authorities on a nine-month Stand-by Arrangement (SBA) in the amount of SDR 2,250 million (about $3 billion or 111 per cent of Pakistan's IMF quota),” Nathan Porter, the International Monetary Fund's Mission Chief to Pakistan, said in a statement on Thursday.

“The new SBA builds on the authorities' efforts under Pakistan's 2019 EFF-supported programme which expires at the end-June. This agreement is subject to approval by the IMF's Executive Board, which is expected to consider this request by mid-July,” the statement added.

Finance Minister Ishaq Dar shared the IMF's press release on Twitter accompanied by a message: “God may be praised”, Planning Minister Ahsan Iqbal called it “good news” and urged them to use the opportunity to turn around the country.

The $3 billion funding, spread over nine months, is higher than expected for Pakistan. The country was awaiting the release of the remaining $2.5 billion from a $6.5 billion bailout package agreed in 2019, which expires on Friday. "The new SBA will support the authorities' immediate efforts to stabilise the economy from recent external shocks, preserve macroeconomic stability and provide a framework for financing from multilateral and bilateral partners," the statement said.