IMF and Pakistan Reach Agreement on Economic Reform Program for Extended Fund Facility

The proposed reform program aims to transition Pakistan from economic stabilization to robust, inclusive, and resilient growth.

Following extensive discussions between the International Monetary Fund (IMF) and Pakistani authorities, significant progress has been made towards finalizing a comprehensive economic policy and reform program. Led by Nathan Porter, the IMF's Mission Chief to Pakistan, the discussions centered on developing a home-grown economic program that could receive support under the IMF's Extended Fund Facility (EFF).

The proposed reform program aims to transition Pakistan from economic stabilization to robust, inclusive, and resilient growth. Key components of the program include strengthening public finances to reduce vulnerabilities by enhancing domestic revenue mobilization through fairer taxation. Additionally, there are plans to increase spending on human capital, social protection, and climate resilience.

Efforts to ensure the viability of the energy sector, including reforms aimed at reducing the high cost of energy, were also discussed. Other priorities include maintaining low and stable inflation through appropriate monetary and exchange rate policies, improving public service provision through restructuring of state-owned enterprises (SOEs) and privatization, and promoting private sector development by fostering a level-playing field for investment and strengthening governance.

While the discussions have made significant headway, further policy deliberations will take place virtually in the coming days to finalize the agreement. This agreement will not only receive financial support from the IMF but also from Pakistan's bilateral and multilateral partners.

The IMF team expressed gratitude to the Pakistani authorities, private sector, and development partners for their cooperation and hospitality throughout the mission. This collaborative effort signifies a strong commitment to advancing economic reforms and achieving sustainable growth in Pakistan.