Islamabad (Web Desk/Agencies): The International Monetary Fund (IMF) and Pakistan’s authorities have reached a staff-level agreement on the first review of Pakistan's 37-month $7 billion Extended Fund Facility (EFF) and a new 28-month $1.3 billion arrangement under the Resilience and Sustainability Facility (RSF).
Upon Board approval, Pakistan will gain access to approximately $1 billion under the EFF, bringing the total disbursements under the facility to around $2 billion.
A key component of the agreement includes the strengthening of Pakistan's fiscal framework, notably through changes to the agriculture income tax by provincial governments to broaden the tax base and enhance fairness. This move is expected to improve fiscal transparency and establish the groundwork for long-term economic stability.
In addition, the IMF has endorsed Pakistan’s commitment to maintaining monetary stability through a tight policy stance, which aims to keep inflation within the targeted range of 5-7% while stabilizing the foreign exchange market. Significant reforms in the energy sector are also underway, with efforts to reduce circular debt, lower tariffs, and accelerate the transition to renewable energy sources, aiming to alleviate fiscal pressures and foster sustainability.
Furthermore, the government’s ongoing focus on governance reforms in state-owned enterprises (SOEs), combating corruption, and advancing climate resilience initiatives such as smart water management and green mobility projects, is expected to bolster the nation’s economic trajectory.
With these comprehensive reforms in place, Pakistan is poised to achieve inclusive growth, strengthening its economic fundamentals and building a resilient environment. The country’s economic journey continues, with a clear focus on sustainability and long-term prosperity.
