February 27, 2020 / 4:16 PM / a month ago

Pakistan could get $450 million in IMF funds if staff-level deal approved

FILE PHOTO: International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas/File Photo

WASHINGTON (Reuters) - International Monetary Fund staff and Pakistani authorities have reached an agreement that could pave the way for a disbursement of $450 million in IMF funds, if approved by the IMF’s executive board, an IMF spokesman said on Thursday.

IMF spokesman Gerry Rice said the staff-level agreement would be reviewed by the Fund’s executive board and IMF management in early April.

“Completion of this means that the disbursement, when approved by the executive board, would be around $450 mln to Pakistan, Rice told a regular IMF briefing.

The IMF agreed to a $6 billion, three-year rescue package last year — its 13th bailout program for Pakistan since the late 1980s — as the South Asian country of 208 million people wrestles with a balance-of-payments crisis.

IMF officials earlier this month completed a 10-day visit to Pakistan, concluding it was making progress on economic reforms and that inflation would start to ease after surging to 14.6% in January, its highest in more than a decade.

On Thursday, Ernesto Ramirez Rigo, the IMF’s mission chief for Pakistan, announced that IMF staff and Pakistani authorities had reached agreement on policies and reforms needed to complete the second review under the IMF’s Extended Fund Facility.

No details were provided about the substance of those policies and reforms.

Pakistan has already put in place new tariffs on power aimed at lifting government revenues and has reduced its revenue collection target, but still faces a shortfall of 387 billion rupees ($2.51 billion).

That has left some economists and former finance officials questioning whether the government would need to introduce new taxes or ask the IMF to waive some of its program requirements.

Reporting by Andrea Shalal; Editing by Chizu Nomiyama and Tom Brown

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