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IMF expects agreement for release of second tranche to Pakistan this week

Islamabad, 15 November, 2023(GNP): The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, confirmed on Wednesday the anticipation of an agreement for the release of the second tranche, totaling $3 billion under the Standby Arrangement (SBA), to Pakistan.

Speaking to a television’s Haslinda Amin during an interview in Singapore, Georgieva expressed her expectation for the agreement to be finalized within this week.

This announcement from the IMF’s top official comes amidst reports suggesting the IMF’s counsel to Pakistan against fostering a group of preferred investors or distortions in the country through the Special Investment Facilitation Council (SIFC). The IMF emphasizes the necessity of ensuring transparency and accountability in business dealings.

The IMF executive board previously sanctioned a crucial nine-month SBA with Pakistan to bolster its economic stabilization program.

The board’s approval greenlit an immediate disbursement of $1.2 billion, with the remaining funds to be phased over the program’s duration, contingent upon two quarterly reviews.

Following the ongoing negotiations and discussions, the IMF’s technical staff conducted the initial assessment of the short-term loan agreement from November 2 to November 10.

Informed sources have indicated that most areas have been covered during policy-level discussions, with only a few unresolved matters remaining.

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The IMF staff mission is now moving forward to finalize the Memorandum of Economic and Financial Policies (MEFP), aiming for a positive conclusion on Wednesday (today).

Once completed, Pakistan’s case will be presented to the executive board for approval of the successful completion of the first quarterly review under the nine-month $3 billion Standby Arrangement, which was signed in July. The approval will pave the way for the disbursement of the second tranche, expected early next month.

During her conversation Georgieva commended the Pakistani authorities, especially the finance minister, for their steadfast commitment to the economic program in challenging times.

She highlighted tax collection as a significant issue, stressing that Pakistan’s current tax-to-GDP ratio of 12% needs to increase to at least 15% for sustainable revenue generation to support the economy.

Georgieva urged the government to enhance tax collection efforts, emphasizing, “Collect taxes from those in Pakistan who can pay.