Prime Minister Shehbaz Sharif of Pakistan reiterated the imperative of reducing national debt as the International Monetary Fund (IMF) greenlit the disbursement of the last tranche amounting to $1.1 billion under the $3 billion Stand-By Arrangement (SBA). His remarks, made a day after the IMF’s approval, underscored the government’s commitment to fiscal responsibility and long-term economic stability.
PM Shehbaz hailed the approval of the third tranche as a step towards economic stability and commended the efforts of the financial team, particularly Finance Minister Muhammad Aurangzeb. The funds, part of the IMF agreement, are aimed at bolstering Pakistan’s economic resilience.
The IMF’s Executive Board completed the second and final review of Pakistan’s economic reform program, leading to the immediate disbursement of $1.1 billion. Antoinette Sayeh, the IMF’s Deputy Managing Director and Chair, emphasized positive developments in Pakistan’s economic indicators, citing moderate growth, decreased external pressures, and a decline in inflation. She urged Islamabad to capitalize on this stability by implementing sound macroeconomic policies and structural reforms.
Despite the approval of the final tranche, Pakistan has formalized a request for a new bailout package ranging between $6 to $8 billion under the Extended Fund Facility (EFF), with potential augmentation through climate financing. The specifics of the package, including size and timeframe, will be determined following discussions on the major contours of the program scheduled for May 2024.
PM Shehbaz’s emphasis on debt reduction reflects a broader national strategy to prioritize financial sustainability and mitigate reliance on external funding, signaling a shift towards self-reliance in Pakistan’s economic policies.
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