Pakistan has reached a significant agreement with the International Monetary Fund (IMF) for a new USD 7 billion aid package aimed at addressing the country’s chronic economic issues. This 37-month Extended Fund Facility Arrangement (EFF) builds upon the economic stability achieved under the 2023 Stand-by Arrangement (SBA), pending approval by the IMF’s Executive Board.
The IMF’s statement highlights that the new program aims to bolster macroeconomic stability and lay the groundwork for stronger, more inclusive, and resilient growth in Pakistan.
Key reforms include fiscal and monetary policy enhancements, efforts to broaden the tax base, improve management of State-Owned Enterprises (SOEs), and ensure fair investment conditions. Additionally, the program seeks to enhance human capital and expand social protection through the Benazir Income Support Programme (BISP).
The IMF shows the importance of continued robust financial support from Pakistan’s development and bilateral partners to effectively achieve the program’s objectives. During the May 2024 staff visit to Islamabad, led by IMF Mission Chief Nathan Porter, discussions were held to finalise the agreement.
This agreement represents Pakistan’s latest effort to stabilise its economy and manage debts through significant IMF assistance, following earlier bailouts. The country’s fiscal plans, including increased tax revenues and spending realignments, are geared towards qualifying for a long-term IMF loan amid ongoing economic challenges.
