IMF and Pakistan reaches agreement for US$6 billion loan

Monitoring Desk: IMF has reached 39-month Extended Fund Arrangement (EFF) worth US$6 billion with Pakistan, said IMF website.

According to statement issued by the IMF, the Extended Fund Facility arrangement aims to support the authorities’ strategy for stronger and more inclusive growth by reducing domestic and external imbalances, removing impediments to growth, increasing transparency, and strengthening social spending.

Important points of IMF-Pakistan understanding includes:

Structural reform for rekindle economic growth and improve living standards.

This agreement is subject to IMF management approval and to approval by the Executive Board, subject to the timely implementation of prior actions and confirmation of international partners’ financial commitments.

The program aims to support the authorities’ strategy for stronger and more balanced growth by reducing domestic and external imbalances, improving the business environment, strengthening institutions, increasing transparency, and protecting social spending.

Improving public finances and reducing public debt through tax policy and administrative reforms to strengthen revenue mobilization and ensure a more equal and transparent distribution of the tax burden.

PM Imran Khan meets Managing Director IMF Christine Lagarde in Beijing

Forthcoming budget will aim for a primary deficit of 0.6 percent of GDP supported by tax policy revenue mobilization measures to eliminate exemptions, curtail special treatments, and improve tax administration.

Scaling up the Benazir Income Support Program and improve targeted subsidies, with the goal of protecting the most vulnerable segments of society.

The State Bank of Pakistan will focus on reducing inflation, which disproportionately affects the poor, and safeguarding financial stability.

A market-determined exchange rate will help the functioning of the financial sector and contribute to a better resource allocation in the economy.

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