The International Monetary Fund (IMF) mission and Pakistan have made significant progress towards reaching a staff-level agreement for an extended fund facility (EFF), the global lender announced on Friday.
The IMF’s comments contributed to the benchmark share index reaching a record high, surpassing the key 76,000 level.
The IMF has initiated discussions with Pakistan on a new loan program after Islamabad recently completed a short-term $3 billion program, which helped prevent a sovereign debt default.
An IMF team, led by mission chief Nathan Porter, concluded discussions with Pakistani authorities on Thursday after arriving in the country on May 13, the lender stated.
“The mission and the authorities will continue policy discussions virtually over the coming days, aiming to finalize discussions, including the financial support needed to underpin the authorities’ reform efforts from the IMF and Pakistan’s bilateral and multilateral partners,” Porter said.
“The authorities’ reform program aims to move Pakistan from economic stabilization to strong, inclusive, and resilient growth,” the statement added.
It noted that Pakistani authorities “plan to continue to strengthen public finances to reduce vulnerabilities by improving domestic revenue mobilization through fairer taxation while scaling up spending for human capital, social protection, and climate resilience.”
Additionally, they plan to “secure energy sector viability, including reforms to reduce the high cost of energy; continue progress towards low and stable inflation through appropriate monetary and exchange rate policies; improve public service provision through state-owned enterprise (SOE) restructuring and privatization; and promote private sector development by securing a level playing field for investment and stronger governance,” Porter added.
Describing the discussions as “fruitful,” Porter mentioned that the global lender and the Pakistani authorities will “continue policy discussions virtually over the coming days, aiming to finalize discussions, including the financial support needed to underpin the authorities’ reform efforts from the IMF and Pakistan’s bilateral and multilateral partners.”
Pakistan is expected to seek at least $6 billion under the new program and request additional financing from the IMF under the Resilience and Sustainability Trust.
The global lender has emphasized that prioritizing reforms to revitalize the Pakistani economy outweighs the size of the new loan package being negotiated.
Ahead of the discussions, the IMF had warned earlier this month that downside risks for the Pakistani economy remained exceptionally high.
 mission and Pakistan have made significant progress towards reaching a staff-level agreement for an extended fund facility (EFF), the global lender announced on Friday.){kind=link}