Getting rid of debt to be real success, says PM as $1.1bn IMF tranche received

ISLAMABAD: Expressing satisfaction over the approval of $1.1 billion final tranche by the International Monetary Fund (IMF), Prime Minister Shehbaz Sharif said on Tuesday Pakistan will achieve “real success” if it gets rid of its debt instead of merely securing another loan tranche. He hoped that this tranche would help bring economic stability to the country.

“Real success lies in getting rid of the debt and not securing [another] loan [tranhce],” the Prime Minister said in a statement while reacting to the IMF approval of the last tranche of $1.1 billion for Pakistan under the $3 billion Stand-By Arrangement (SBA), which was received to the State Bank of Pakistan (SBP) on Tuesday. In a statement, the SBP said the amount would be reflected in its foreign exchange reserves for the week ending on May 3, 2024.

Expressing satisfaction over the approval of the third tranche by the Washington-based lender, which has already released $1.9 billion to Pakistan under the agreement, PM Shehbaz lauded the financial team including Finance Minister Muhammad Aurangzeb for their efforts.

Stressing that the $1.1 billion tranche will “bring more economic stability”, the Prime Minister noted that the government made bitter and tough decisions concerning the economy, adding such decisions were now proving themselves beneficial in the form of improved and stabilised economic indicators.

Highlighting the significance of the IMF programme to save Pakistan from economic default, PM Shehbaz said the bitter and tough decisions were coming to fruition in the form of economic stability. “Allah has given us the opportunity to improve the economy. We will make all possible efforts to bring in the economic stability. The real success is not to get loans but to get rid of them,” he remarked.

He said the time of riddance from the loans and economic prosperity would arrive soon if the efforts in the right direction continued with the same passion.His remarks came after IMF’s Executive Board completed the second and final review of Pakistan’s economic reform programme supported by the SBA.

“The Board’s decision allows for an immediate disbursement of SDR 828 million (around $1.1 billion), bringing total disbursements under the arrangement to SDR 2.250 billion (about $3 billion),” the IMF said in an official statement.

Underscoring positive development in the country’s economic indicators, the IMF’s Deputy Managing Director and Chair Antoinette Sayeh pointed out moderate growth, eased external pressures and a decline in inflation, and called on Islamabad to capitalise on this hardwon stability, persevering — beyond the current arrangement — with sound macroeconomic policies and structural reforms to create stronger, inclusive and sustainable growth.

It is to be noted that Pakistan has made a formal request to the IMF for seeking the next 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 timeframe will only be determined after evolving consensus on the major contours of the next programme in May 2024.