Islamabad, Jan 2: Low on funds According to a media report on Tuesday, Pakistan is anticipated to receive USD 700 million as the next installment of the IMF’s bailout when the global lender’s Executive Board convenes on January 11. According to the Dawn newspaper, the board of the International Monetary Fund, based in Washington, is scheduled to discuss and possibly approve the disbursement of the next USD 700 million tranche for Pakistan under the current USD 3 billion Stand-By Arrangement (SBA).The IMF Executive Board calendar shows that meetings will take place on January 8, 10, and 11, with a discussion of Pakistan’s case on the final day. The USD 3 billion current IMF programme is scheduled to end in the second week of April, with about USD 1.8 billion still to be disbursed. In July, the first installment of USD 1.2 billion was made available. Regarding the first review under Pakistan’s SBA, a Staff-Level Agreement was reached in November 2023 between IMF staff and Pakistani authorities.The Executive Board of the IMF must approve this agreement. Although the board was supposed to approve the process in December, it appears that January 11 has been set aside for it. This is a significant development for Pakistan’s economy because the next tranche’s disbursement may offer much-needed financial support. The future course of Pakistan and the IMF’s continuing economic cooperation will be determined by the results of the next meeting. In a separate statement, the IMF stated that “significant progress has been made over the FY23 budget, and discussions between the IMF staff and the authorities on policies to strengthen macroeconomic stability in the coming year continue.”The IMF also updated its data and projections for Pakistan’s economy, which showed a difficult future for the nation in 2024. The real GDP is expected to contract by 0.5% this year, according to the IMF’s most recent estimates, suggesting possible economic challenges. Concurrently, a notable rise is predicted for the Consumer Price Index in 2024. This points to a significant increase in inflation, creating more difficulties for the stability of the national economy. Even though the State Bank’s reserves unexpectedly increased by USD 853 million in the week ending December 22, 2023, Pakistan is eager to get the second tranche, which will demonstrate that Islamabad has complied with the IMF’s demands for economic recovery.The Ministry of Finance recently declared that it had successfully exceeded the IMF’s target of collecting Rs 4.425 trillion in revenue between July and December by Rs 43 billion. Pakistan is more likely to get the remaining USD 3 billion SBA funding in March after obtaining the second tranche of USD 700 million this month. But, the country has already been informed by acting Finance Minister Shamshad Akhtar that in order to boost the economy, a new deal with the IMF must be signed.Pakistan will never be able to bid the lending agency farewell. Pakistan continues to experience extremely high inflation despite difficult circumstances; in December, it was 29.7%, up from 29.2% in November. According to the most recent data, Pakistan has participated in 24 agreements with the IMF since joining on July 11, 1950. Dawn claims that this demonstrates the nation’s historical reliance on IMF assistance to handle economic difficulties.Pakistan has entered into 23 agreements with the IMF in the last few decades as a result of its ongoing balance-of-payments issues, which are primarily caused by a growing trade deficit. When the nation encountered yet another balance-of-payments crisis in 2019, the current programme with the lender was agreed upon. Since then, Pakistan has received payments from the IMF totaling approximately $4 billion, leaving a $2.6 billion balance.
