Pakistan, IMF agree for $7bln staff level agreement

Islamabad: A $7 billion staff-level agreement has been reached between Pakistan and the International Monetary Fund (IMF).

According to the IMF statement, the final approval of the 37-month program will be given by the Executive Board of the IMF.

The statement said that under the new staff-level agreement with the IMF, Pakistan will get $7 billion over 37 months.

According to the IMF statement, the program includes measures to strengthen fiscal and monetary policy, broaden the tax base, and provide Pakistan with an expansionary fund facility based on its economic stability under the 2023 Standby Arrangement.

In the declaration, it was said that in the last year, inflation has decreased in Pakistan and foreign exchange reserves have improved, economic stability has been promoted in Pakistan. The new loan program will lead to economic stability in Pakistan.

It has been said in the declaration that for economic stability, Pakistan will increase tax revenue. The share of taxes in Gross Domestic Product (GDP) will be increased to three percent during the loan program, and the tax net will also be increased in the retail sector.

According to the IMF declaration, the federal government and the provinces need to make joint economic efforts. The fair distribution of expenses under the 18th Amendment must be reviewed for economic expenses, and the expenditure on education, public health, and public infrastructure must be increased in the provinces. To increase revenue, provinces have to increase sales and agricultural taxes.

The declaration said that by January 1, 2025, the Federation and the provinces will also have to enact necessary legislation related to individual and corporate income tax.

The IMF statement said that the support of mutual friends will be very important for Pakistan to achieve these goals.