Islamabad, Sep 26: Following the board meeting, the International Monetary Fund (IMF) has disbursed the first tranche of $1 billion to Pakistan, part of a larger $7 billion loan under the Extended Fund Facility, which spans 37 months.
The IMF’s official statement highlighted that Pakistan’s economic growth rate has reached 2.4%, primarily driven by increased agricultural activities. However, the country continues to grapple with significant challenges, including a difficult business climate, weak governance, and a limited tax base.
The IMF noted that over the past year, Pakistan has implemented continuous policies under the Stand-By Arrangement to restore economic stability.
The recent growth rate is a positive sign, yet it comes alongside concerns about inflation, which has now decreased to a single digit. This improvement is attributed to sound fiscal and monetary policies that have helped control the current account deficit and rebuild foreign exchange reserves.
Since June, the State Bank of Pakistan has reduced the policy rate by 450 basis points, further aiding economic recovery.
The IMF commended Pakistan’s strong budget presented in June 2024 but also emphasized the critical need for increased investment in health, education, and infrastructure to combat poverty and enhance economic potential.
Additionally, the IMF warned that without appropriate reform adjustments, Pakistan risks falling further behind its peers, stressing that the success of the program will rely heavily on ongoing financial support from development partners.
