WASHINGTON: The International Monetary Fund (IMF) has said that its agreement with Pakistan would lead to a “straight away” disbursement of $1.17 billion to the country.

“It’s an agreement on a combined seventh and eighth review of the programme... that will translate into about $1.17 billion being disbursed to Pakistan. Pretty much, straight away,” IMF’s Communication Director Gerry Rice said at a Thursday afternoon news briefing in Washington.

He said this brought the total disbursements from the IMF to Pakistan under the ongoing program to about $4.2 billion. Answering a question about the timeframe for releasing the tranche, the IMF official said the executive board is likely to meet anywhere between three to six weeks from now.

The IMF and Pakistan reached a staff-level agreement on Wednesday that they hoped would stabilise the country’s economy and depreciating currency. The IMF also hoped that it would bring down high inflation and end Pakistan’s political instability.

The agreement “could also unlock more funding for Pakistan, which in recent weeks has neared the brink of a balance of payments crisis,” Mr Rice said.

The IMF official noted that this was an agreement on a combined seventh and eighth review of the programme that the Fund has with Pakistan.

”And we’re hoping this will help to stabilise the economy and amongst other things help expand the social safety net to protect the most vulnerable; accelerate structural reforms; and help stabilise the macroeconomic situation in Pakistan,” he added.

”The announcement by the IMF will prove to be a much-needed shot in the arm for Pakistan’s ailing economy,” Aqdas Afzal, a Karachi-based analyst and assistant professor of economics at Habib University, told The New York Times. He noted that the sharp increase in energy prices after the invasion of Ukraine and rising commodity prices more generally had hurt the country.

The newspaper noted that reviving the loan programme and getting the economy back on track “have been a political litmus test for Pakistan’s new prime minister.”

The report also highlighted the government’s fear that the IMF-induced reforms could trigger “public backlash that could hurt PML-N’s chance of success in the next general elections.”

Published in Dawn, July 16th, 2022