PIDE Commentary: On the 23rd IMF Programme for Pakistan (Commentary)

A PIDE COMMENTARY

International Monetary Fund (IMF) issued a staff report on the seventh and eighth reviews of the extended arrangement under the Extended Fund Facility (EFF) on September 1, 2022. As per the review report, the authorities of Pakistan are allowed to draw USD 1.1 billion, keeping in view the measures taken by authorities to address fiscal and external challenges. The IMF board has also approved the extension of the EFF till June 2023 along with extra Special Drawing Rights (SDR) of 720 million and that brings the total access under the EFF to about USD 6.5 billion. The review report has also identified some priority measures to be considered by the Pakistani authorities, such as the implementation of an approved budget, marketdetermined exchange rate policy, proactive and prudent monetary policy, the expansion of  the social safety net, and structural reforms related to the performance of state-owned enterprises (SOEs) and governance. The set of measures that have been identified contains both short-term and medium-term measures to promote long-term growth. In this regard, the Pakistan Institute of Development Economics (PIDE) has also been working extensively to identify the measures that are necessary to remove the bottlenecks in the economy to improve productivity and increase growth. Therefore, the objective of this document is twofold, i.e., a commentary on the measures suggested by the review report, and what other measures should be part of the programme.