Neighboring country may get second installment of $700 million from IMF in January, claims report

Pakistan, which is facing cash crisis, is expected to get $ 700 million as the next installment of the relief package in the meeting of the Executive Board of the International Monetary Fund (IMF) on January 11. According to the report of 'Dawn' newspaper, the board of the Washington-based International Monetary Fund (IMF) will discuss the distribution of the next tranche of $700 million for Pakistan under the existing $3 billion Stand-By Arrangement (SBA). Will likely give final approval.

According to the calendar of the IMF Executive Board, the upcoming meetings are scheduled on January 8, 10 and 11, with the Pakistan case to be discussed on the last day. The current IMF program is worth $3 billion and is expected to end in the second week of April, with about $1.8 billion remaining unpaid. The initial tranche of $1.2 billion was released in July.

In November 2023, a staff-level agreement was reached between IMF staff and Pakistani officials regarding the first review under Pakistan's SBA. The agreement is subject to approval by the IMF's Executive Board. Despite expectations of board approval in December, the process appears to have been scheduled for January 11. This development is important for Pakistan's economic outlook as the disbursement of the next tranche can provide Pakistan with much-needed financial assistance. The outcome of the upcoming meeting will enhance the ongoing economic cooperation between Pakistan and the IMF.

"Discussions continue among IMF staff and officials on policies to strengthen macroeconomic stability in the coming year, and have made important progress on the fiscal 2023 budget," the IMF said in another statement. The IMF also updated economic projections and data for Pakistan, showing a challenging outlook for the country in 2024. According to the latest IMF data, real GDP is projected to decline by 0.5 percent for the year, indicating potential economic headwinds. Along with this, there is also a possibility of increase in inflation in 2024.

If this situation arises, price rise will pose additional challenges to the economic stability of the country. Despite a surprise increase of USD 853 million in State Bank reserves in the week ending December 22, 2023, Pakistan is keen to receive the second IMF tranche, indicating that Islamabad has met the IMF's demands for economic reforms. Have done. The Finance Ministry has recently announced that the July-December revenue collection target of Rs 4.425 trillion given by the IMF has been successfully achieved.