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WASHINGTON: The International Monetary Fund (IMF) has approved another three-year loan package for Pakistan of $6 billion.
The IMF earlier in July had made an upfront payment of $991 million on completion of all prior actions committed by Pakistan before signing the fund program.
The IMF delegation led by Mission Chief to Pakistan Ernesto Ramirez-Rigo said, “Despite a difficult environment, program implementation has been good, and all performance criteria for end-September were met with comfortable margins.”
Ernesto Ramirez-Rigo pointed to signs of improving economic stability, including the move to a flexible exchange rate, and slowing inflation that is projected to fall under 12 percent next year.
But he said more work was needed to target money laundering and on terror finance controls.
Also read: Pakistan and IMF delegation to hold meeting today
Approval of the first performance review of Pakistan’s policy program will also help unlock significant funding from bilateral and multilateral partners.
Under the loan program, the government agreed to cut civil investment and freeze military spending while promising to substantially raise revenues to stem a yawning fiscal deficit, and pledging to collect 5.5 trillion rupees in taxes.
Also read: IMF arrives in Pakistan to revive economic progress
The recent visit of the IMF officials was made for the payment of the next tranche from the international financial body likely to be dispatched in 2020.
The IMF mission concluded their visit to Pakistan by meeting Advisor to Prime Minister Imran Khan on Finance, Revenue and Economic Affairs, Abdul Hafeez Shaikh.
During the official visit, they also met the government’s financial team, provincial governments’ representatives and other stakeholders.
The mission also appreciated financial reforms introduced by the country even when it faces severe challenges.
The next IMF economic survey is expected to take place in early 2020.
Pakistan seeks the largest loan package from the IMF. Pakistan is seeking a loan package of up to USD 8 billion from the IMF to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country’s economy.
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