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IMF mission returns to Washington sans staff level agreement

Monitoring Desk

ISLAMABAD: The International Monetary Fund (IMF) said on Friday that significant progress has been made towards reaching a staff-level agreement with Pakistan for an Extended Fund Facility, however, its mission returned to Washington without handing over a new bailout package.
The IMF’s two-week assessment mission concluded without striking a new deal as Islamabad grappled with the challenges of political instability and enhanced economic vulnerabilities.
“Building on the economic stabilization achieved through the successful completion of the 2023 Stand-by Arrangement, the IMF and the Pakistani authorities made significant progress toward reaching a Staff Level Agreement (SLA) on a comprehensive economic policy and reform program that can be supported under an Extended Fund Facility (EFF),” said Nathan Porter after the end of the visit.
Pakistani sources said that the IMF gave a very hard time on energy, monetary and taxation policies. They said that the implementation of all these conditions would put an extraordinary burden on the people and some conditions carry implications for bilateral relations.
It will then decide on whether to give a programme to Pakistan or not.
“Based on the preliminary findings of this mission, staff will prepare a report that subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision”, added Porter.
Led by its Mission Chief Nathan Porter, the IMF delegation stayed in Pakistan for two weeks and met with key stakeholders. The IMF team also held a breakfast meeting with the US ambassador to Pakistan Donald Blome at the residence of the IMF Resident Representative Esther Perez last Wednesday, according to government sources.
The IMF mission had quietly landed in Pakistan on May 10 and held meetings with Pakistani authorities. However, in its press statement, the IMF said that the mission began on May 13 and ended on May 23
A key government functionary told The Express Tribune that the purpose of the IMF visit was to gauge Pakistan’s budget preparations and see whether its next fiscal year economic framework was in line with the overall objectives of ensuring fiscal and external sector sustainability.
The finance ministry told Prime Minister Shehbaz Sharif last week about the conditions of the IMF programme, including maintaining a primary budget surplus of 1% of the GDP or Rs1.25 trillion.

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