The much-anticipated $7 billion bailout package from the International Monetary Fund (IMF) for Pakistan remains uncertain, as the IMF Executive Board’s schedule until August 28 has been released without including Pakistan’s name on the agenda.
This has raised concerns about the timeline for the disbursement of the loan.
However, sources indicate that the Executive Board has the discretion to add agenda items outside of the official schedule, leaving room for optimism. This development follows the staff-level agreement between Pakistan and the IMF, signed on July 12.
The finance minister has hinted at the possibility of the board meeting taking place at the end of the month, potentially offering relief to Pakistan’s struggling economy.
Officials explained that, after a staff-level agreement is reached, the Executive Board meets within four to six weeks to finalize the deal.
The new IMF loan program, set to span over 37 months, is expected to provide critical financial support to Pakistan, helping to stabilize the economy, boost foreign reserves, and address ongoing fiscal challenges.
“The Pakistani authorities and the IMF team have reached a staff-level agreement on a comprehensive program endorsed by the federal and provincial governments, that could be supported by a 37-month Extended Fund Arrangement (EFF) in the amount equivalent to SDR 5,320 million (or about US$7 billion at current exchange rates),” IMF’s Mission Chief to Pakistan Nathan Porter on the signing of the agreement stated.
The agreement between Pakistan and the IMF is subject to approval by the IMF’s Executive Board and timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.
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IMF reaches $7 billion staff-level loan agreement with Pakistan
According to the IMF statement, the 37-month loan program aims to build on the macroeconomic stability achieved over the past year. The key policy objectives include gradual fiscal consolidation through reforms to broaden the tax base and remove exemptions, while increasing resources for critical development and social spending. The plan is to increase tax revenues by 1.5% of GDP in FY25 and 3% of GDP over the program.
It also includes efforts to control inflation and rebuild external buffers andromoting private sector-led growth by eliminating economic distortions.
