Jihad Azour, Director of the Middle East and Central Asia Department at the IMF, has underscored the critical need for Pakistan to “stay the course” on its reform agenda as the country engages in a 37-month, $7 billion Extended Fund Facility (EFF) with the IMF. This statement was made during a meeting with a Pakistani delegation, which included key financial officials such as Finance Secretary Imdad Ullah Bosal and State Bank of Pakistan Governor Jameel Ahmad.
In a statement released by the Finance Division, Azour commended Pakistan for the successful initiation of the latest IMF programme and reiterated the necessity of ongoing reforms to ensure economic stability. He highlighted the IMF’s support for Pakistan’s commitment to the EFF.
The Pakistani delegation expressed gratitude for the IMF’s assistance, especially in light of the recent approval of the EFF. They detailed the government’s efforts in fiscal consolidation, revenue enhancement, and reforms in the energy sector and state-owned enterprises, aimed at transitioning the economy from stabilization to growth.
Following the IMF Executive Board’s approval last month, Pakistan received its first loan tranche of nearly $1.1 billion. The Executive Directors have emphasized the need for Pakistan to move away from a state-led growth model and enhance the business environment.
Global credit-rating agencies, including Fitch, Moody’s, and S&P, have also echoed the IMF’s call for continued reforms to secure long-term economic stability. Fitch has warned that Pakistan’s significant funding needs pose risks if challenging reforms are not implemented, noting its recent upgrade of Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC+’.
The current IMF programme includes 22 structural benchmarks and conditionalities, which prohibit tax amnesties and new preferential tax treatments. It also stipulates that the average premium between the interbank and open market rates should not exceed 1.25% over any consecutive five business days.
