In a welcome development, the IMF has projected Pakistan’s economic growth at 4 % for the year 2022. The IMF Executive Board meeting was held in Washington for consultation with Pakistan on the sixth review of the Extended Fund Facility (EFF). Through the EFF the IMF aims to facilitate states in addressing the issue of balance of payments problems in the medium-term, by introducing structural changes that require time and a longer program engagement.
The purpose of the review was to ensure the timely provision of SDR 750 million (about $1 billion) to Pakistan, which makes the amount under the arrangement to SDR 2,144m (about $3bn) or 106 percent of the country’s quota.
Thus, the successful negotiations with the IMF have resulted in the resumption of the 6 billion USD loan to Pakistan stalled since 2019. While the IMF waiver and resumption of the loan may have been crucial for the incumbent government to smoothly sail through challenging times of the pandemic but reassuringly one finds greater eagerness among the government and political circles to end Pakistan’s perpetual reliance on the IMF. In the wake of the successful negotiations, Finance Minister Shaukat Tareen has stated that “If we start generating five percent to six percent balanced growth, which means sustainable growth, then I don’t think we need another IMF program”. There is no denying the fact that Pakistan has long been reliant on IMF, but it is showing clear signs of aversion towards the international bodies due to its tough conditions. Indeed, the country will have to achieve an economic growth rate of at least 5 percent to be able to end its reliance on external actors as well as ensure its economic sovereignty.