The International Monetary Fund (IMF)’s Executive Board will take up Pakistan’s first review of the ongoing $3 billion Standby Arrangement (SBA) on Jan. 11, 2024, with the country expected to receive a second tranche of $700 million following its approval.
A report published by Bloomberg News on Thursday, citing a spokesperson of the lender, stated that the Board would consider the staff-level agreement inked between Islamabad and the IMF last month. This puts to rest speculation over the bailout program, which had mounted over the past week amidst reports of the Board not including Pakistan’s review on its agenda for the rest of December before it proceeds on holiday.
Timely approval of the second tranche is consider key for the country’s economy ahead of general elections due on Feb. 8, 2024. Earlier, the IMF had stated that it would complete the final review of the SBA—expiring on April 14, 2024—with the new government, with interim Finance Minister Shamshad Akhtar making clear that the country would need to proceed to a fresh program immediately after the expiry of the SBA.
In recent weeks, there have been indications of the IMF’s approval of “harsh steps” taken by the government to revive the economy, including increasing electricity and gas tariffs and maintaining a high policy rate in the face of rampant inflation. On Wednesday, IMF Executive Director Bahador Bijani, at an event hosted by Pakistan’s ambassador to the U.S., had noted an overall improvement in Pakistan’s economic situation, saying “Pakistani authorities have delivered.”
According to an official statement, he had said he believes the future of Pakistan is “very bright,” adding it was “one of the most important countries in the region and in the world.” Similarly, IMF Mission Chief to Pakistan Nathan Porter had expressed satisfaction with the actions and policies of the incumbent interim government, saying they reflected its commitment to steer the country toward stability.