Pakistan and International Monetary Fund (IMF) have reached a reached a staff-level agreement for a package that would release $500 million to the country, the IMF and Pakistan’s finance minister said.

"Pending approval of the Executive Board, the reviews' completion would release around $500 million," the IMF said. “Fiscal performance in the first half of the fiscal year remained strong, with the general government registering a primary surplus of 0.7 percent of GDP on the back of strong domestic tax revenue growth. Development and social spending have been accelerated.”

Finance Minister Dr Abdul Hafeez Shaikh also confirmed the agreement on Twitter, saying:

(1/2) I would like to share that the Government of Pakistan has reached a staff level agreement with the IMF. Overcoming the challenges created by the Pandemic has required concerted effort.

— Dr. Abdul Hafeez Shaikh (@a_hafeezshaikh) February 16, 2021

In a statement, IMF said that Pakistan's progress under the Extended Fund Facility (EFF) had been temporarily disrupted by the shock of the pandemic.

"The Pakistani authorities remain committed to ambitious policy actions and structural reforms to strengthen economic resilience, advance sustainable growth, and achieve the EFF’s medium-term objectives," the statement noted.

Last year, IMF and Pakistani reached an agreement to pave the way for a disbursement of $450m in IMF funds pending approval from the global lender's executive board.

Pakistan and the IMF have been working to implement IMF-supported economic reforms, in particular tax collection, directed at stabilising the economy and shoring up a wide fiscal deficit.

Though the bailout programme was still pending, Pakistan received $1.4 billion in emergency financing from the IMF to allow it to fund targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact.

Pakistan entered a $6 billion IMF programme in 2019.