The International Monetary Fund (IMF) sanctioned a $500 million disbursement to Pakistan for budgetary assistance after its Executive Board concluded delayed reviews of Pakistan’s $6 billion loan program.
Antoinette Sayeh, the IMF Deputy Managing Director stated that the most recent payments induced total payments under the Extended Fund Facility to $2 billion since the program was first adopted in July 2019.
As per IMF, the program strives to promote Pakistan’s policies to help the economy and protect lives and livelihoods amid the currently unfolding Covid-19 pandemic, guarantee macroeconomic and debt sustainability, and modern structural reforms to lay the bases for strong, employment opportunities, and long-lasting growth that helps all Pakistanis.
“The Pakistani authorities have continued to make satisfactory progress under the Fund-supported program, which has been an important policy anchor during an unprecedented period. While the Covid-19 pandemic continues to pose challenges, the authorities’ policies have been critical in supporting the economy and saving lives and livelihoods. The authorities have also continued to advance their reform agenda in key areas, including on consolidating central bank autonomy, reforming corporate taxation, bolstering management of state-owned enterprises, and improving cost recovery and regulation in the power sector,” said IMF Deputy Managing Director Antoinette Sayeh.
He further spoke about the challenges encountered from the current pandemic and the governments’ commitment to the medium-term objectives under the EFF. He also informed that the policy mix had been recalibrated to uncover an appropriate balance among boosting the economy, guaranteeing debt sustainability, and promoting structural reforms while sustaining social cohesion. Therefore, active ownership and constant reform implementation are important in the time of unusually high uncertainty and risks.
The director also discussed that the Fiscal performance in the first half of FY 2021 was reasonable, which provided targeted assistance and maintained stability. Furthermore, additional supported efforts were also incorporated, which includes increasing the revenue base, managing it properly to spend it right and obtaining provincial contributions.