THE International Monetary Fund’s (IMF) executive board approved an immediate disbursement of about US$700 million (RM3.25 billion) for Pakistan yesterday as part of a programme to support the cash-strapped country through an economic crisis.

The funds were unlocked after the board approved the first review of a nine-month, US$3 billion loan agreement reached in July to help Pakistan weather a balance-of-payments crisis and service massive external debt.

Yesterday’s disbursement brought the total released under the agreement to around US$1.9 billion, the IMF said in a statement.

Pakistan’s advancement under the programme “has supported significant progress in stabilising the economy following significant shocks”, IMF deputy managing director Antoinette Sayeh said in the statement.

“There are now tentative signs of activity pickingvup and external pressures easing,” she said, adding that “continued strong ownership remains critical to ensure the current momentum continues and stabilisation of Pakistan’s economy becomes entrenched”.

The IMF said macroeconomic conditions in Pakistan had “generally improved” since the programme was implemented, and predicted economic growth of 2% this year.

The fiscal position has been strengthened, with foreign reserves increasing and a “broadly stable” exchange rate, it said.

Despite the progress cited by the IMF, consumer inflation in Pakistan remains elevated, rising by 29.7% in the year to December, the country’s statistics bureau showed.

In its statement, the IMF said inflation could decline to an annual rate of 18.5% by mid-year, so long as policy was “appropriately tight”. – AFP, January 12, 2024.