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PM Emphasizes Debt Reduction Amid IMF Approval

PM Emphasizes Debt Reduction Amid IMF Approval

Prime Minister Shehbaz Sharif emphasized the importance of reducing debt rather than relying on securing further loans, following the approval of the last tranche of $1.1 billion from the International Monetary Fund (IMF) under the $3 billion Stand-By Arrangement (SBA). He expressed satisfaction over the approval of the third tranche and credited the financial team, including Finance Minister Muhammad Aurangzeb, for their efforts in achieving economic stability.

While acknowledging the government’s tough decisions regarding the economy, the prime minister highlighted the positive impact of these decisions on improving and stabilizing economic indicators. The recent tranche, he noted, would contribute to further economic stability.

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The IMF’s completion of the second and final review of Pakistan’s economic reform program under the SBA led to the immediate disbursement of $1.1 billion, bringing the total disbursements under the arrangement to $3 billion. Antoinette Sayeh, the IMF’s Deputy Managing Director and Chair, highlighted positive developments in Pakistan’s economic indicators, including moderate growth, eased external pressures, and a decline in inflation. She urged Islamabad to capitalize on this stability by continuing sound macroeconomic policies and structural reforms to foster stronger, inclusive, and sustainable growth.

Pakistan has formally requested the IMF for a new bailout package ranging between $6 to $8 billion under the Extended Fund Facility (EFF), with the possibility of augmentation through climate financing. However, the exact size and time frame of the new program will be determined after consensus is reached on its major contours in May 2024.