IMF begins second review of standby arrangement with Pakistan

ISLAMABAD – The International Monetary Fund (IMF) and Pakistan's finance ministry on Thursday began the second and last review of Pakistan’s $3 billion standby arrangement with the global lender.

A delegation led by IMF mission chief for Pakistan Nathan Porter called on Finance Minister Muhammad Aurangzeb today to conduct the second review, the finance ministry said in a press release on Thursday. Aurangzeb welcomed the delegation and said the government was committed to working with the IMF on a reform agenda for the country’s economic growth and stability.

According to the press release, the two sides held discussions on overall macroeconomic indicators, government efforts for fiscal consolidation, structural reforms, energy sector viability and governance of state-owned enterprises. The finance minister thanked the IMF for their continued support and hoped for productive meetings in the second review.

“Pakistan has met all structural benchmarks, qualitative performance criteria and indicative targets for successful completion of the IMF review,” Pakistan's finance ministry said on Wednesday, adding that the review would be a four-day affair and it would lead to a successful IMF staff-level agreement. 

The ministry said the last review, if successful, would get Pakistan a tranche of around $1.1 billion. 

Pakistan's newly-elected Prime Minister Shehbaz Sharif has already directed his finance team to initiate work on an Extended Fund Facility (EFF) after the standby arrangement expires on April 11.

The IMF has said it will design a medium-term programme if Islamabad applies for one. The government has not officially stated the size of the additional funding it is seeking through a successor programme from the fund.

The finance minister had previously said that Islamabad would be “very keen to start discussions on another EFF with them during these talks”. He added that further negotiations on the larger, longer programme would be taken forward on the sidelines of the IMF and World Bank’s spring meetings in April in Washington.