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Pakistan Reaches Staff-Level Agreement with IMF with Harsh Austerity

March 20, 2024 (EIRNS)—Pakistan has reached a staff-level agreement with the International Monetary Fund (IMF) on the release of the final $1.1 billion tranche of a $3 billion bailout program. The agreement, which the IMF announced on March 20, must now be approved by the IMF’s Board in late April, the Fund said in a statement.

Nathan Porter, the IMF mission chief in Pakistan, is quoted in the Fund statement, typically saying, “Pakistan’s economic and financial position has improved in the months since the first review...” but adds, “Ongoing policy and reform efforts are required to address Pakistan’s deep-seated economic vulnerabilities.” In brief, that means Pakistan must implement the conditionalities stipulated in the agreement, which includes broadening the tax base, i.e. an increase in taxes, increasing power and gas tariffs, and maintaining a tight credit policy.

It is reported that the new Finance Minister Aurangzeb Khan is seeking a further loan agreement but nothing has been publicly mentioned on this.