The second, third, fourth, and fifth reviews of the Extended Arrangement under the Extended Fund Facility (EFF) for the country, has been completed by the Executive Board of the International Monetary Fund (IMF).
The IMF Executive Board has completed the second, third, fourth, and fifth reviews of the Extended Arrangement and approved an immediate disbursement of $500 million for budget support.
Following the Executive Board discussion on Pakistan on March 24, IMF Deputy Managing Director and Acting Chair Antoinette Sayeh said in a statement that the Pakistani government had “continued to make satisfactory progress” under the programme, which she termed as an “important policy anchor during an unprecedented period”.
“While the Covid-19 pandemic continues to pose challenges, government policies have been critical in supporting the economy and saving lives and livelihoods. The government also continued to advance its reform agenda in key areas, including consolidating central bank autonomy, reforming corporate taxation, bolstering management of state-owned enterprises, and improving cost recovery and regulation in the power sector,” Sayeh said.
Talking further about the government’s policy, the IMF official said that it had been “recalibrated to strike an appropriate balance between supporting the economy, ensuring debt sustainability, and advancing structural reforms while maintaining social cohesion”.
She emphasized “strong ownership and steadfast reform implementation” which she said were crucial in the face of unusually high uncertainty and risks.
The statement also reads that fiscal performance in the first half of the fiscal year 2020-21 was “prudent, providing targeted support and maintaining stability”.
Sayeh said that further sustained efforts by the government, which included broadening the revenue base, managing its spending, and securing contributions from provinces would “help achieve a lasting improvement in public finances and place debt on a downward path”.