Pakistan restricts supplementary grants at the request of the IMF

In a recent move, the interim government of Pakistan has taken the decision to halt the release of supplementary grants as requested by the International Monetary Fund (IMF). This decision, reported by ARY News on Thursday, signifies a significant change in the authority responsible for approving such grants.

According to the details, the power to release supplementary grants will now rest solely with the next elected government, stripping the federal government of this authority. Additionally, specific limits have been set for government ministries and departments, urging them not to exceed these predefined boundaries.

This decision comes on the heels of Pakistan receiving a $700 million loan tranche from the IMF under the nine-month Stand-By Arrangement (SBA). The approval from the IMF’s Executive Board, following the first review of Pakistan’s economic reform program, paved the way for the immediate disbursement of around $700 million. This brings the total disbursements under the SBA to approximately $1.9 billion.


Read More: Pakistan’s Foreign Exchange Reserves Decline to $6.9 Billion, Highlights IMF Agreement Progress

The approval from the IMF is a result of the staff-level agreement reached between the Fund and Pakistan on November 15, 2023. The agreement highlights Pakistan’s commitment to implementing crucial reforms, including fiscal consolidation, energy sector reforms, a return to a market-determined exchange rate, and improvements in state-owned enterprises and governance to attract investment and create job opportunities, all while strengthening social assistance.

Read More: IMF Approves $700 Million Loan for Pakistan’s Economy

The current IMF program, amounting to $3 billion, is set to conclude in the second week of April 2024, with approximately $1.8 billion yet to be disbursed. The initial tranche of $1.2 billion was released in July, and the recent decision reflects the ongoing efforts to navigate Pakistan’s economic challenges and foster sustainable development.