Salient features of IMF program for Pakistan

 Pakistan will have to take certain measures to achieve targets agreed with IMF to secure the loan

IMF Executive Board yesterday approved the revival of IMF loan program for Pakistan. This program was signed by the PTI government in 2019 but IMF stalled it when PTI government voilated the conditions of the program in February 2022. The ruling coalition was trying to revive the program since its came to power in April 2022. 

The IMF has set tough conditions for loan program. Pakistan will reduce deficits and increase revenues. Electricity and gas prices likely to go up.

 

Here are salient features of this Extended Fund Facility.  

Pakistan will get $1.10 billion tranche in next few days

Under the Extended Fund Facility total allocation increased from $6 billion to $6.5 billion till June 2023

Pakistan will undertake efforts to reduce the energy losses. Pakistan will increase levies and energy tariffs to strengthen the energy sector and to reduce unsustainable losses

Pakistan will maintain a market-determined exchange rate without any government and State Bank intervention to stablise the Pak Rupee

Pakistan will increase tax to GDP ratio to increase tax revenues to create space for much-needed social protection and strengthen public debt sustainability

Pakistan will strengthen the social protection with increased allocation in the current high inflation environment means more spending through BISP and other social spending programmes to save the most vulnerable people

Pakistan will achieve a small primary surplus of Rs 750 billion to reduce fiscal and external pressures and build confidence

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