After a final round of talks, the International Monetary Fund (IMF) and Pakistan have reached a staff-level agreement for the release of a $1.1 billion tranche under the Stand By Agreement (SBA). However, this agreement is subject to approval by the IMF Executive Board.

This agreement signifies the culmination of discussions aimed at securing the final tranche of bailout funds that crisis-hit Pakistan obtained last year, averting a potential debt default. The recent visit of IMF’s mission to Pakistan involved meetings with Pakistani officials over a five-day period to review the fiscal consolidation benchmarks established for the loan.

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In a statement, the IMF recognized the improvement in Pakistan’s economic and financial position since the first review, noting a continuing recovery in growth and confidence. However, the IMF cautioned that Pakistan’s growth is expected to be modest in 2024, while inflation remains significantly above target. The statement emphasized the necessity for ongoing policy and reform efforts to address economic vulnerabilities amidst persistent challenges stemming from elevated external and domestic financing needs, as well as an uncertain external environment.