Policy efforts taken by Pakistan under EFF helped ‘stabilise economy, rebuild confidence’: IMF

Policy efforts undertaken by Pakistan under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) “helped stabilise the economy and rebuild confidence,” the lending agency’s spokesperson said on Thursday. IMF Communications Director Julie Kozack made the statement during a weekly press briefing. In response to a question regarding Pakistan’s progress in meeting terms set by the Fund, Kozack said, “Pakistan’s policy efforts under the EFF have helped stabilise the economy and rebuild confidence.” She further said that fiscal performance had been “strong”. Kozack said that Pakistan currently had a primary fiscal surplus of 1.3 per cent of the gross domestic product (GDP), which was “in line with programme targets”. “Headline inflation has been relatively contained. And Pakistan posted its first current account surplus in 14 years in FY25,” Kozack added. She also said that an IMF staff team was expected to visit Pakistan starting February 25 for discussions on the third review under the EFF and the second review under the Resilience and Sustainability Facility (RSF). Kozack also highlighted the IMF’s recent Governance and Corruption Diagnostic report, which she said “includes proposals for reforms, including simplifying tax policy design, levelling the playing field for public procurement, and improving the asset declaration transparency”. It is worth mentioning that an IMF mission led by Iva Petrova is due to visit Pakistan later this month to review the implementation of the $7 billion EFF and the $1.1bn RSF facilities. During the almost two-week visit ending March 11, the engagements would be of greater significance as both sides would also discuss budget proposals based on performance this year and set broad contours of the upcoming budget (for the fiscal year 2026-27), particularly those relating to provincial finances. The programme’s performance as of end-Dece­mber 2025 — the period for review — has mostly been up to the mark, alb­eit with a revenue shortfall, which authorities bel­i­eve could be reduced following a recent super tax ruling by the Federal Cons­t­ituti­onal Court that went in the government’s favour. Upon the successful completion of the review, Pakistan will be eligible for the disbursement of about $1bn (760 million Special Drawing Rights) under the EFF and another $200m under the RSF by the end of April. The EFF is a longer-term IMF loan programme designed to help countries address deep-seated economic weaknesses and medium-term balance-of-payments problems.

By none@none.com (News Desk)

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