An International Monetary Fund (IMF) mission is scheduled to visit Pakistan on November 2nd to conduct the first review of the country’s $3 billion standby arrangement (SBA). The announcement was made by the IMF’s resident representative to Pakistan, Esther Perez Ruiz.
Pakistan is currently under a caretaker government as it seeks to navigate a path to economic recovery. This comes in the aftermath of an IMF loan program, approved in July, which played a crucial role in preventing a sovereign debt default.
Under the terms of this program, Pakistan received an initial disbursement of $1.2 billion from the IMF in July. The upcoming mission to Pakistan, led by Nathan Porter, will focus on the first review of the current Stand-By Arrangement.
In preparation for the impending IMF review, the Ministry of Finance has scheduled an important meeting with various ministries, divisions, and departments to gather updates on structural benchmarks, indicative criteria, and performance criteria previously agreed with the IMF.
The Ministry of Finance has been actively working to align with the IMF’s requirements, including efforts to control the budget deficit target. Provinces have been advised to curb their spending, and preliminary estimates indicate that Punjab and Sindh have taken steps to limit their expenditures.
However, a significant challenge lies in the growing debt servicing requirements, projected to exceed the initially targeted Rs7.3 trillion due to the higher policy rate set by the State Bank of Pakistan, reaching a range of Rs8.3 trillion to Rs8.5 trillion for the current fiscal year 2023–24.
