| Islamabad: The International Monetary Fund (IMF) has announced that it has reached a staff-level agreement (SLA) with Pakistan on a USD 3 billion Stand-By Arrangement (SBA), according to news published on June 30.
Read: Govt-IMF staff-level meeting in last week of February: Finance Ministry
The IMF agreement with Pakistan is aimed at stabilizing Pakistan’s economy in the face of recent external shocks, supporting efforts to achieve sustainable economic growth, and providing a framework for financing from multilateral and bilateral partners. The IMF agreement with Pakistan will also create room for social and development spending through improved domestic revenue mobilization and careful spending execution, addressing the needs of the Pakistani people. The SLA is subject to approval by the IMF Executive Board, which is expected to consider the request by mid-July.
The IMF staff, led by IMF’s Mission Chief to Pakistan Nathan Porter, engaged in both in-person and virtual meetings with Pakistani authorities to discuss the terms of the new financing engagement under the IMF Stand-By Arrangement. The IMF agreement with Pakistan builds upon the authorities’ previous efforts under Pakistan’s 2019 Extended Fund Facility (EFF)-supported program, which concluded in June. The current economic challenges, including the impact of catastrophic floods in 2022, a spike in international commodity prices due to Russia’s conflict in Ukraine, and policy missteps, have led to stalled economic growth, high inflation, and declining reserves.
Read: IMF asks Pakistan to subsidise low earners, tax high earners
Prime Minister Shehbaz Sharif praised the IMF agreement with Pakistan, expressing confidence that it would lead to economic stability and sustainable growth. The IMF emphasized the importance of steadfast policy implementation, including fiscal discipline, a market-determined exchange rate, energy sector reforms, climate resilience, and an improved business climate, to overcome the current challenges.
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