External financial assistance: The only key to unlock IMF deal

March 24, 2023 (MLN): The International Monetary Fund (IMF) has emphasized the critical need for timely financial assistance from external partners to support Pakistan's economic policy efforts to ensure the successful completion of the review.

Julie Kozack, Director of Communications at the IMF on Thursday during a press briefing stated, "A Staff Level Agreement will follow once the few remaining points are closed. I can also say that financing assurances, right, what we're looking for here are a standard feature of all IMF programs."

She went on to say that aside from support provided by the IMF, Pakistan's, EFF-supported program receives financing from other multilateral institutions, including the World Bank, the ADB, and the AIIB and bilateral partners, notably China, Saudi Arabia, and the UAE.

"So, we do need to ensure that we have those financing assurances in place in order for us to be able to take the next step with Pakistan," she added. 

Discussions are ongoing between IMF staff and the Pakistani authorities toward a Staff Level Agreement on policies to complete the ninth review of Pakistan's extended Fund Facility, the authorities are committed to implementing the necessary reforms.

The government has started to implement decisive actions to stabilize the economy and restore confidence.

While providing space to accommodate the needs related to the floods, including through an increase in social assistance through the Benazir Income Support Program, which is aimed at the most vulnerable, she said.

She also highlighted that Pakistan's economy is facing multiple challenges including slowing growth, high inflation and large financing needs on the back of devastating floods.

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