The IMF will release a tranche of $1.17 billion within three to six weeks
The International Monetary Fund (IMF) said its deal with Pakistan would result in an “immediate” disbursement of $1.17 billion to the country.
“This is an agreement on a combined seventh and eighth review of the program…which will result in approximately $1.17 billion disbursed to Pakistan. Almost immediately,” said the director of communications of the IMF, Gerry Rice, during a press conference Thursday afternoon in Washington.
He said this brought total IMF disbursements to Pakistan under the ongoing program to around $4.2 billion. Responding to a question about the timeline for the release of the tranche, the IMF official said the board would likely meet between three and six weeks from now.
The IMF and Pakistan reached a services-level agreement on Wednesday that they hoped would stabilize the country’s economy and the depreciating currency. The IMF also hoped it would reduce high inflation and end Pakistan’s political instability.
The deal “could also unlock more funding for Pakistan, which in recent weeks has come close to the brink of a balance-of-payments crisis,” Rice said.
The IMF official noted that this was an agreement on a combined seventh and eighth review of the program the Fund has with Pakistan.
“And we hope this will help stabilize the economy and, among other things, expand the social safety net to protect the most vulnerable; accelerate structural reforms; and help stabilize the macroeconomic situation in Pakistan,” he added.
“The IMF announcement will prove to be a much-needed boost to Pakistan’s struggling 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 rise 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 program and getting the economy back on track “has 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 “a public backlash that could harm the PML-N’s chances of success in the upcoming general elections.”