Pakistan clears hurdles for IMF review, final agreement expected

The newly elected government of Pakistan has indicated its intention to secure a new loan from the International Monetary Fund (IMF).

In line with this, representatives from the IMF are scheduled to visit Pakistan for the second review of the ongoing Stand-By Arrangement (SBA). The review is set to take place from March 14 to 18 in Islamabad.

According to a statement released by the finance ministry, Pakistan has successfully met all structural benchmarks, qualitative performance criteria, and indicative targets required for the IMF review.

This upcoming review marks the final evaluation of the SBA, with a staff-level agreement anticipated upon its completion.

Once this agreement is reached, the final tranche of $1.1 billion under the SBA will be disbursed, subject to approval from the IMF’s Executive Board.

Last summer, Islamabad secured a vital rescue package from the IMF, preventing a potential sovereign debt default.

The successful completion of the final review is expected to unlock approximately $1.1 billion.

Prime Minister Shehbaz Sharif has instructed his finance team, led by newly appointed Finance Minister Muhammad Aurangzeb, to begin preparations for seeking an Extended Fund Facility (EFF) once the standby arrangement concludes on April 11.

The IMF has expressed readiness to develop a medium-term programme if Pakistan submits an application for one.

Notably, the government has not officially disclosed the amount of additional funding it intends to seek through a successor programme from the IMF.