WASHINGTON: The International Monetary Fund’s (IMF) Executive Board is slated to consider Pakistan’s first review on Jan 11, paving the way for the approval of a crucial $700 million tranche.

This financial injection follows the Staff-Level Agreement (SLA) reached last month between Pakistan and the IMF under the nine-month $3bn Stand-By Arrangement (SBA).

“We can confirm that the board meeting for Pakistan will take place on Jan 11,” the IMF said in an email sent to journalists.

The board’s schedule for Dec 11-18, however, still does not include Pakistan. It shows three reviews on Dec 11, that of Armenia, Cabo Verde and Ukraine.

The awaited board approval is a prerequisite for receiving the second tranche, as part of the ongoing financial support. Despite initial expectations for the first review to be on the Executive Board’s agenda for the Dec 1-15 schedule, it was notably absent.

The IMF has been focused on securing re-confirmation of pledges to meet Pakistan’s substantial financing requirements of $24.9bn for the current fiscal year.

This delay has led to speculation among policymakers that discussions on the second review might commence after the general elections and the establishment of the elected government.

The IMF programme’s original timeline envisaged talks for the second review starting on Feb 3, 2024. However, considering the possibility of elections scheduled for Feb 8, negotiations might be deferred to the last week of February or early March 2024. The ongoing SBA programme is set to expire on April 14, 2024.

In a recent statement, IMF Executive Director Bahador Bijani acknowledged a positive shift in Pakistan’s economic situation, emphasising that the “Pakistani authorities have delivered.”

This optimistic sentiment was echoed by Nathan Porter, IMF Mission Chief to Pakistan, who expressed satisfaction with the staff-level agreement. Mr Porter commended the current government’s actions and policies, noting their commitment to steering the country toward economic stabilisation.

At an event hosted by Pakistan’s ambassador to the US, Bahador Bijani highlighted Pakistan’s importance in the region and the world. He expressed confidence in Pakistan’s future, stating that “the future for Pakistan is very bright” and that Pakistanis deserve more recognition on the global stage.

However, challenges persist for Pakistan, including Asia’s fastest inflation, approximately $1bn in dollar-denominated debt due next year, and upcoming elections scheduled for February.

Interim Finance Minister Shamshad Akhtar, in response to the SLA in November, hinted at the possibility of seeking an additional loan from the IMF, characterising the economy as “still fragile.”

While the IMF’s positive assessments and financial support indicate progress in Pakistan’s economic landscape, the country continues to grapple with challenges that necessitate careful economic management and strategic decision-making, especially in the lead-up to the crucial second review and the impending elections.

Published in Dawn, December 9th, 2023

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