The International Monetary Fund (IMF) has said its deal with Pakistan would lead to an “immediate” disbursement of $1.17 billion to the country.
“It’s an agreement on a combined seventh and eighth review of the program. This will result in the disbursement of some $1.17 million to Pakistan. Pretty much, right away,” IMF Communications Director Gerry Rice said at a news conference Thursday afternoon in Washington.
He said this brought the IMF’s total disbursements to Pakistan under the ongoing program to around $4.2 billion. He responded to a question about the timeline for releasing the tranche. The IMF official said the executive board is likely to meet three to six weeks from now.
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The IMF and Pakistan reached a staff-level agreement on Wednesday. They hoped would stabilize the country’s economy and currency depreciation. The IMF also hoped to reduce high inflation and end Pakistan’s political instability.
The deal “could also unlock more funds for Pakistan. Recent weeks have approached the brink of a balance of payments crisis,” Rice said.
The IMF official said it was an agreement on a combined seventh and eighth review of the IMF’s program with Pakistan.
“And we hope this will help stabilize the economy and other things. It will help expand the social safety net to protect the most vulnerable, and accelerate structural reforms. And help stabilize the macroeconomic situation in Pakistan,” he added.
“The IMF’s announcement will prove to be a much-needed shot in the arm for Pakistan’s ailing economy,” Aqdas Afzal. Aqdas Afzal is a Karachi-based analyst and assistant professor of economics at Habib University. He told The New York Times. He noted the sharp rise in energy prices after the invasion of Ukraine. The rise in commodity prices, in general, had hurt the country.
The newspaper noted that reviving the loan program and getting the economy back on track “has been a political litmus test for Pakistan’s new prime minister.”
The report also highlighted the government’s fear that IMF-induced reforms could trigger “a public backlash. That could hurt the PML-N’s chances of success in the upcoming general election.”
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