AUGAF
  • Home
  • Politics
  • Business
  • National
  • News
  • Finance
  • Technology
  • Sports
  • International
  • CommoditiesNew
  • Contact
No Result
View All Result
  • Home
  • Politics
  • Business
  • National
  • News
  • Finance
  • Technology
  • Sports
  • International
  • CommoditiesNew
  • Contact
No Result
View All Result
AUGAF
No Result
View All Result
Home Business

Pakistan, IMF Reaches Staff-Level Agreement For Release of $700 Million Tranche

admin-augaf by admin-augaf
November 15, 2023
in Business, Finance, News
Reading Time: 4 mins read
0
IMF
Share on FacebookShare on TwitterWhatsapp

Washington DC November 15 2023: IMF staff and the Pakistani authorities have reached a staff-level agreement on the first review under Pakistan’s Stand-By Arrangement (SBA), subject to approval by the IMF’s Executive Board, says IMF.

Upon approval, Pakistan will have access to SDR 528 million (around US$700 million).

The agreement supports the authorities’ commitment to advance the planned fiscal consolidation, accelerate cost-reducing reforms in the energy sector, complete the return to a market-determined exchange rate, and pursue state-owned enterprise and governance reforms to attract investment and support job creation, while continuing to strengthen social assistance.

An International Monetary Fund (IMF) team, led by Nathan Porter, visited Islamabad from November 2-15, 2023, to hold discussions on the first review of Pakistan’s economic program supported by an IMF Stand-By Arrangement (SBA). At the conclusion of the discussions, Mr. Porter issued the following statement:

“The IMF team has reached a staff-level agreement (SLA) with the Pakistani authorities on the first review of their stabilization program supported by the IMF’s US$3 billion (SDR2,250 million) SBA. The agreement is subject to approval of the IMF’s Executive Board. Upon approval around US$700 million (SDR 528 million) will become available bringing total disbursements under the program to almost US$1.9 billion.

“Anchored by the stabilization policies under the SBA, a nascent recovery is underway, buoyed by international partners’ support and signs of improved confidence. The steadfast execution of the FY24 budget, continued adjustment of energy prices, and renewed flows into the foreign exchange (FX) market have lessened fiscal and external pressures. Inflation is expected to decline over the coming months amid receding supply constraints and modest demand. However, Pakistan remains susceptible to significant external risks, including the intensification of geopolitical tensions, resurgent commodity prices, and the further tightening in global financial conditions. Efforts to build resilience need to continue.

“In this regard, strengthening macroeconomic sustainability and laying the conditions for balanced growth are key priorities under the SBA. The authorities’ policy priorities include:

  • Continued fiscal consolidation to reduce public debt, while protecting development needs. The authorities are determined to achieve a primary surplus of at least 0.4 percent of GDP in FY24, underpinned by federal and provincial government spending restraint and improved revenue performance supported, if necessary, by contingent measures. The authorities are building capacity to expand the tax base and raise revenue mobilization and are committed to improving the quality of public investment and spending.
  • Strengthening the social safety net to better protect the vulnerable. The authorities will continue the timely disbursements for social protection under BISP’s budget allocation—which are about a third higher than in FY23. This will allow for the expansion of the Unconditional Cash Transfers (UCT) Kafaalat program to 9.3 million families this fiscal year, with an annual inflation adjustment of the stipend. Looking forward, the authorities are seeking to improve the UCT Kafaalat generosity level and to increase enrollment into the Conditional Cash Transfers programs supporting children’s education and health.
  • Further reforms to reduce costs in the energy sector and restore its viability. With the combined circular debt (CD) across power and gas sectors exceeding 4 percent of GDP, immediate action was critical. While protecting vulnerable consumers, the authorities implemented power tariff adjustments that were pending since July 2023 and increased gas prices after a long time, effective November 1, 2023. While these increases were substantial, they were necessary to avoid further arrears that threatened the viability of these sectors and the provision of critical energy supplies. The authorities are also moving to tackle cost-side pressures, including bringing private sector participation to DISCOs, institutionalizing recovery and anti-theft actions, improving PPA terms, and reducing the incentives for captive power.
  • Returning to a market-determined exchange rate and rebuilding FX reserves. While inflows following increased regulatory and law enforcement helped normalize import and FX payments and rebuild reserves, the authorities recognize that the rupee must remain market-determined to sustainably alleviate external pressures and rebuild reserves. To support this, they plan to strengthen the transparency and efficiency of the FX market and to refrain from administrative actions to influence the rupee.
  • Proactive monetary policy to lower inflation toward its target. With appropriately tight monetary policy, inflation should steadily decline and the authorities stand ready to respond resolutely if near-term price pressures reemerge, including due to second-round effects on core inflation or renewed exchange rate depreciation.
  • Building financial sector resilience. Continued vigilance is warranted to safeguard the soundness of the banking system. Priorities include addressing undercapitalized financial institutions, ensuring foreign exchange exposures within regulatory limits, and aligning bank resolution and crisis management frameworks with best practice.
  • Continuing state-owned enterprise and governance reforms to improve the business environment, investment, and job creation. Following passage of the State-Owned Enterprises (SOE) law, the authorities are moving forward with their SOE policy and implementation of their triage plan, including the privatization of select SOEs. High governance and transparency standards will apply to the management of assets under the ownership of the newly created Sovereign Wealth Fund (SWF) and the operations of the SIFC. To further strengthen governance, the authorities will ensure public access to asset declarations from Cabinet members and a task force, with participation from independent experts, will complete a comprehensive review of the anticorruption framework.
  • Deepening cooperation with international partners. The authorities have accelerated the engagement with multilateral and official bilateral partners. Timely disbursement of committed external support remains critical to support the authorities’ policy and reform efforts.
  • “The IMF team thanks the Pakistani authorities, private sector, and development partners for fruitful discussions and cooperation throughout this mission.”
Tags: IMF program
admin-augaf

admin-augaf

Related Posts

Bitcoin
Business

Bitcoin Rally Takes Largest Token Past $111,000 for First Time

May 22, 2025
US Carbon Emissions To Decline Due To Shift In Power Generation Sources
Business

Pakistan Lower House Passes Off the Grid Captive Power Plants Levy Bill

May 22, 2025
UK Retail Sales Slump Points To New Risk Of Recession
Business

UK Private Sector Output Dropped For Second Month as Weaker new order intakes weigh Heavy

May 22, 2025
Fair Global Consult Fair Global Consult Fair Global Consult
ADVERTISEMENT

Recent News

Bitcoin

Bitcoin Rally Takes Largest Token Past $111,000 for First Time

May 22, 2025
US Carbon Emissions To Decline Due To Shift In Power Generation Sources

Pakistan Lower House Passes Off the Grid Captive Power Plants Levy Bill

May 22, 2025
UK Retail Sales Slump Points To New Risk Of Recession

UK Private Sector Output Dropped For Second Month as Weaker new order intakes weigh Heavy

May 22, 2025
Eid ul Azha to Fall on June 7th in Pakistan, Says SUPARCO

Eid ul Azha to Fall on June 7th in Pakistan, Says SUPARCO

May 22, 2025
Sri Lanka economy crisis to get worse before it gets better, PM says

Sri Lanka Cut Rates to 7.75% to Foster Growth

May 22, 2025

Popular News

  • NSS

    President Prohibit National Savings For Changing Rates on Existing Certificates Retrospectively

    0 shares
    Share 0 Tweet 0
  • Pakistan Rupee Appreciate against Dollar in Interbank as IMF Confirmed Board Review Date

    0 shares
    Share 0 Tweet 0
  • Pakistan Rupee Fall After 13 Days of Successive Gains against Dollar on Lower Remittances and Strengthening of US Dollar

    0 shares
    Share 0 Tweet 0
  • Petrol Prices in Pakistan to Return to July 2023 Levels

    0 shares
    Share 0 Tweet 0
  • Pakistan Central Bank Issued Show Cause Notice to Eight Banks Over Currency Speculation

    0 shares
    Share 0 Tweet 0

Categories

  • Budget
  • Business
  • Culture
  • Finance
  • International
  • National
  • News
  • Politics
  • PTI
  • Sports
  • Technology
AUGAF Logo

Follow us on social media:

Recent News

  • Bitcoin Rally Takes Largest Token Past $111,000 for First Time
  • Pakistan Lower House Passes Off the Grid Captive Power Plants Levy Bill
  • UK Private Sector Output Dropped For Second Month as Weaker new order intakes weigh Heavy

Category

  • Budget
  • Business
  • Culture
  • Finance
  • International
  • National
  • News
  • Politics
  • PTI
  • Sports
  • Technology

Recent News

Bitcoin

Bitcoin Rally Takes Largest Token Past $111,000 for First Time

May 22, 2025
US Carbon Emissions To Decline Due To Shift In Power Generation Sources

Pakistan Lower House Passes Off the Grid Captive Power Plants Levy Bill

May 22, 2025
  • Home
  • Politics
  • News
  • Business
  • National
  • Finance
  • Technology
  • International

© 2021 AUGAF.

No Result
View All Result
  • Home
  • Politics
  • Business
  • National
  • News
  • Finance
  • Technology
  • Sports
  • International
  • Commodities
  • Contact

© 2021 AUGAF.