WASHINGTON: The International Monetary Fund (IMF) has today completed
- the combined second through fifth reviews of the Extended Arrangement under the Extended Fund Facility (EFF) for Pakistan, allowing for an immediate purchase equivalent to about US$500 million for budget support.
- Program performance has remained satisfactory notwithstanding the unprecedented challenges of the Covid-19 shock, and the authorities’ policies have been critical in supporting the economy and saving lives and livelihoods.
- The Pakistani authorities remain committed to ambitious policy actions and structural reforms to strengthen economic resilience, advance sustainable growth, and achieve the economic reform program medium-term objectives.
In a statement issued here, the IMF said Pakistan’s 39-month EFF arrangement was approved by the Executive Board on July 3, 2019 (see Press Release No. 19/264 ) for SDR 4.268 billion (about $6 billion at the time of approval of the arrangement, or 210 percent of quota). The program aims to support Pakistan’s policies to help the economy and save lives and livelihoods amid the still unfolding Covid-19 pandemic, ensure macroeconomic and debt sustainability, and advance structural reforms to lay the foundations for strong, job-rich, and long-lasting growth that benefits all Pakistanis.
Moreover, the IMF has decided not to require further remedial action in connection with the breach of obligations under Article VIII, Section 5.
This was stated by Deputy Managing Director Antoinette Sayeh and Acting Chair, who at the conclusion of the meeting of Executive Board said, “the Executive Board of the International Monetary Fund (IMF) reviewed Pakistan’s remedial actions and data revisions linked to a noncomplying purchase under the Extended Arrangement under the Extended Fund Facility as well as a breach of obligations under Article VIII, Section 5. The non-complying purchase arose as a result of a lack of inter-agency coordination in the compilation of government guarantees provided by the federal government to state-owned enterprises that contributed to incorrect estimates of government guarantees starting as far back as FY 2016.
In view of the strong and proactive commitment by Pakistan to provide timely and accurate data to the IMF in the future, the Executive Board decided not to require further remedial action in connection with the breach of obligations under Article VIII, Section 5. As the authorities have taken appropriate corrective measures since the purchase in December 2019, the Executive Board also granted a waiver for the nonobservance of the quantitative performance criterion.”