IMF Review Mission
ISLAMABAD: The International Monetary Fund (IMF) review mission is scheduled to visit Pakistan once the new governments are established, a process expected to take two to five weeks after the February 8 general elections. The mission holds significant importance for the finalization of the $3 billion Standby Arrangement (SBA), set to expire on April 12. To avoid default on foreign debt repayments, the IMF delegation will work on defining the key features of an anticipated medium-term bailout package.
Amid controversy over the election results, potential delays in the mission’s second review and the release of the final tranche of $1.2 billion under the SBA raise concerns about economic stability. Foreign exchange reserves stand at around $8.04 billion, with a recent decline due to external debt repayments.
The IMF’s visit is contingent on the formation of the government at both national and provincial levels, with expectations that the review mission may arrive in Islamabad by the end of the current month or early next month, according to the Ministry of Finance.
However, doubts about the transparency of the election process, with calls for investigations into irregularities and fraud allegations by the USA, EU, and other countries, add uncertainty to the situation.
While the tentative date for the IMF’s review mission was initially set for the first week of February, it was postponed due to the general elections. If the review occurs in February or March, meeting the April 12 deadline for the last tranche under the SBA becomes challenging. The possibility of a new agreement with the IMF may become imminent, as the next budget for 2024-25 will likely depend on IMF input.
Dr. Khaqan Najeeb, a former adviser to the finance ministry, emphasizes the critical nature of completing the second review on time. He suggests using the review visit to discuss the contours of a new program supported by the IMF, addressing fiscal and monetary frameworks, social spending, and structural reforms for energy, SOE divestment, and climate resilience.
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