ISLAMABAD: The new $7 billion loan programme approved by the International Monetary Fund (IMF) will hinge on the implementation of “sound policies and reforms” aimed at strengthening the country’s macroeconomic stability, addressing deep structural challenges and fostering more inclusive and resilient growth.
These efforts are central to the government’s ongoing strategy to stabilise the economy and create sustainable growth conditions, the IMF said in a statement.
The IMF stressed that continued financial support from Pakistan’s development and bilateral partners would be essential for the programme’s success.
The IMF statement said that Pakistan had taken key steps to restore economic stability with consistent policy implementation under the 2023-24 Standby Arrangement.
Growth has rebounded (2.4 per cent in FY24), supported by activity in agriculture, while inflation has receded significantly, falling to single digits, amid appropriately tight fiscal and monetary policies.
A contained current account and calm foreign exchange market conditions have allowed the rebuilding of reserve buffers. Reflecting disinflation and steadier domestic and external conditions, the State Bank of Pakistan has been able to cut the policy rate by a total of 450 basis points since June, also supported by an appropriately tight FY25 budget.
Because of the progress and stability achieved under the nine-month 2023 SBA, the government embarked on renewed efforts to address these challenges, build resilience and enable sustainable growth.
The key priorities under the new EFF-supported programme include rebuilding policymaking credibility and entrenching macroeconomic sustainability through consistent implementation of sound macro policies and a broadening of the tax base; advancing reforms to strengthen competition and raise productivity and competitiveness; reforming state-owned enterprises (SOEs) and improving public service provision and energy sector viability; and building climate resilience.
Published in Dawn, September 27th, 2024
