File photo. Saul Loeb—AFP
In statement, global lender cites ‘satisfactory progress’ on measures undertaken to stabilize the economy
The International Monetary Fund (IMF) on Wednesday approved the disbursement of $500 million to Pakistan as it revived a $6 billion Extended Fund Facility following the pause of a year.
“The Pakistani authorities have continued to make satisfactory progress under the Fund-supported program, which has been an important policy anchor during an unprecedented period,” IMF Deputy Managing Director Antoinette Sayeh said in a statement. “While the COVID-19 pandemic continues to pose challenges, the authorities’ policies have been critical in supporting the economy and saving lives and livelihoods,” she added.
The latest release marks the third loan tranche of the $6 billion program. Previously, the IMF had disbursed $1.45 billion in two installments, bringing the total disbursed thus far to $2 billion. The board’s approval to revive the Extended Fund Facility followed the approval of four pending reviews of Pakistan’s economic progress, including measures taken to stabilize the economy such as a massive hike in power tariffs and the imposition of new taxes. The government has also agreed to grant greater autonomy to the State Bank of Pakistan.
In its statement, the IMF noted that authorities in Pakistan had taken corrective actions to address institutional shortcomings, including a lack of interagency coordination, to correct issues that had necessitated a pause on the loan program.
Last April, the IMF had to postpone a board meeting for the approval of the second review after Islamabad failed to announce a mini-budget to readjust the economy. In February, both sides agreed to proceed by considering the second, third, fourth and fifth reviews jointly.