Prime Minister Shehbaz Sharif on Wednesday commended his team for unlocking the new $1.3 billion arrangement with the International Monetary Fund (IMF), along with a successful first review of the ongoing 37-month bailout programme.
The announcement from the global money lender came early Wednesday morning, saying that it had reached a staff-level agreement (SLA) with the Pakistani authorities.
Speaking at a federal cabinet meeting today, the premier thanked the members of his team, saying it was through “day and night” efforts that led to the achievement of this milestone.
“This was through teamwork, no doubt,” he said, adding that some had questioned whether the government would be able to achieve the feat without the mini-budget.
“With God’s grace, the mini-budget did not come,” he said, adding that despite challenging circumstances, with terrorism prevalent in two provinces and inflation reaching historic highs amid other problems, the government as well as the nation persevered.
“Particularly, the common people who faced difficulties, if their sacrifices weren’t there, the staff-level [agreement] would not have been possible as they face the burden of inflation,” he stressed and said that the salaried class and the provinces contributed to the milestone.
He went on to commend the provinces for passing the tax laws to meet the requirements of the Fund amid reluctance and concerns.
In February, in a rare show of unity, the Sindh provincial assembly had unanimously passed the Sindh Agricultural Income Tax Bill. Punjab and Khyber Pakhtunkhwa had already passed the amended agricultural income tax law that was a part of the federal government’s commitments under the IMF’s $7bn agreement spanning 37 months.
IMF deal brings total disbursements to about $2bn
Earlier today, the federal government reached a deal with the IMF for a new $1.3bn arrangement and also agreed on the first review of the ongoing 37-month bailout programme, the Fund had confirmed on Tuesday.
Pending board approval, the government can unlock the $1.3bn under a new climate resilience loan programme spanning 28 months.
It will also free $1bn for the country under the $7bn bailout programme, which would bring those disbursements to $2bn.
“The IMF team has reached a staff-level agreement (SLA) with the Pakistani authorities on the first review of the 37-month extended arrangement under the Extended Fund Facility (EFF), and on a new 28-month arrangement under the IMF’s [Resilience and Sustainability Trust] with total access over the 28 months of around $1.3 billion,” Nathan Porter, mission chief to Pakistan, said in a statement by the Fund.
Pakistan had requested $1bn from the IMF’s RSF in October. The funding under RSF is made available to nations that commit to high-quality reforms to build resilience against climate catastrophes through adaptation. It is repayable over 30 years, including a 10-year grace, and is normally cheaper than terms for an EFF, such as the $7bn loan programme which is underway.
