Islamabad [Pakistan], March 26 (ANI): Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement on the first review of Pakistan's 37-month USD 7 billion Extended Fund Facility (EFF) and a new 28-month USD 1.3 billion arrangement under the Resilience and Sustainability Facility (RSF), as reported by ARY News following confirmation by both the Pakistani government and the IMF on Tuesday.

According to ARY News, citing a statement by the IMF, the staff-level agreement with Pakistani authorities covers the first review of the EFF and a new RSF arrangement, granting access to approximately USD 1.3 billion over 28 months. Once approved by the IMF's Executive Board, Pakistan will be able to access around USD 1 billion under the EFF, bringing the total disbursements to about USD 2 billion.

Khurram Schehzad, Advisor to the Pakistani Finance Minister, also confirmed the agreement, highlighting Pakistan's significant progress in economic reforms, focusing on tax equity, monetary stability, energy sector transformation, and climate resilience, ARY News reported.

The IMF noted that Pakistan has made substantial strides in restoring macroeconomic stability and rebuilding confidence over the past 18 months, despite a challenging global environment. According to ARY News, the IMF further stated that while the economic growth remains moderate, inflation has dropped to its lowest level since 2015, financial conditions have improved, sovereign spreads have narrowed, and external balances are stronger. However, the IMF warned of potential risks, including pressures to ease policies, geopolitical shocks to commodity prices, tighter global financial conditions, or rising protectionism that could undermine stability.

The IMF also highlighted the significant challenge of climate-related risks in Pakistan, emphasising the need for resilience-building, including adaptation measures, and stressed the importance of maintaining progress over the past 18 months by strengthening public finances, ensuring price stability, rebuilding external buffers, and eliminating distortions to foster inclusive, private sector-driven growth, ARY News reported.

The IMF team expressed gratitude to the Pakistani authorities, private sector, and development partners for their warm hospitality during their visit to Islamabad and Karachi, as well as for the 'fruitful' discussions held. (ANI)