ISLAMABAD   -   The State Bank of Pakistan (SBP) has received SDR 828 million (around $1.1 billion) from the International Monetary Fund (IMF) on Tuesday.

IMF Executive Board completed the second review under the Stand-by Arrangement (SBA) in its meeting on 29Apr2024 and approved disbursement of SDR 828 million for Pakistan. Accordingly, SBP received SDR 828 million (around US$ 1.1 billion) in value in its account from IMF, bringing total disbursements under the arrangement to SDR 2.250 billion (about $3 billion). The amount shall be reflected in SBP’s foreign exchange reserves for the week ending on 3rd May 2024.

Pakistan’s 9-month SBA, approved by the Executive Board on July 12, 2023, successfully provided a policy anchor to address domestic and external imbalances as well as a framework for financial support from multilateral and bilateral partners.

Following the Executive Board discussion, Antoinette Sayeh, Deputy Managing Director and Chair, made a statement saying: “Pakistan’s determined policy efforts under the 2023 Stand By Arrangement (SBA) have brought progress in restoring economic stability. Moderate growth has returned; external pressures have eased; and while still elevated, inflation has begun to decline. Given the significant challenges ahead, Pakistan should capitalize on this hard won stability, persevering—beyond the current arrangement—with sound macroeconomic policies and structural reforms to create stronger, inclusive, and sustainable growth. Continued external support will also be critical.

“The authorities’ revenue performance, as well as federal spending restraint, helped achieve a sizeable primary surplus in the first half of FY2024, in line with program targets. Continued revenue mobilization efforts and spending discipline at both federal and provincial levels remain critical to ensure that the primary surplus target is achieved. Beyond FY2024, continued fiscal sustainability and additional space for social and development spending depend on further mobilizing revenues, especially from non filers and undertaxed sectors, and on improving public financial management.”

“The authorities have stabilized the energy sector’s circular debt over the course of the SBA through timely tariff adjustments and enhanced collection efforts. While these actions need to continue, it is also critical that the authorities undertake cost side reforms to address the sector’s underlying issues and viability.