Washington DC March 24 2023: IMF need to ensure that the fund have financing assurances from bilateral and multilateral donors in place in order for us to be able to take the next step with Pakistan, says director of communications at the IMF.
Pakistan's economy faces multiple challenges including from slowing growth, high inflation and large financing needs. And of course, this is all coming on the back of devastating floods.
Discussions are ongoing between IMF staff and the Pakistani authorities toward a Staff Level Agreement on policies to complete the ninth review of Pakistan's extended Fund Facility, the authorities are committed to implementing the necessary reforms. They've started to implement decisive actions to stabilize the economy and restore confidence. While providing space to accommodate the needs related to the floods, including through an increase in social assistance through the Benazir Income Support Program, which is aimed at the most vulnerable.
Timely financial assistance from external partners will be critical to support the authorities' policy efforts and ensure the successful completion of the review.
“At this point, ensuring that there is sufficient financing to support the authorities is the paramount priority. A Staff Level Agreement will follow once the few remaining points are closed. I can also say that financing assurances, right, what we're looking for here are a standard feature of all IMF programs. Aside from support provided by the IMF, Pakistan's, EFF supported program receives financing from other multilateral institutions, including the World Bank, the ADB, and the AIIB and bilateral partners, notably China, Saudi Arabia, and the UAE” says Julie Kozack, director of communications at the IMF.
She added “So, we do need to ensure that we have those financing assurances in place in order for us to be able to take the next step with Pakistan.”
The EFF was approved by the IMF Executive Board on July 3, 2019 for SDR 4,268 million (about US$6 billion at the time of approval, or 210 percent of quota). In order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board approved an extension of the EFF until end-June 2023, rephasing and augmentation of access by SDR 720 million that will bring the total access under the EFF to about US$6.5 billion.
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