Answer to Question #281462 in Macroeconomics for rro

Question

 analyze IMF program that we are currently in, namely Extended Financing Facility of USD 6billion. What are the conditions of IMF and how can Pakistan fulfil those conditions? 

Answer 1

When Pakistan's economy was in a critical stage and desperately required assistance to meet the balance of payment crisis, the IMF committed to give support under the Extended Fund Facility (EFF) as part of a bailout package. Cash-strapped Pakistan and the International Monetary Fund (IMF) have reached an agreement at the staff level to finish the sixth evaluation of a $ 6 billion support package needed to restart the stalled program. When Pakistan's economy was in a critical stage and desperately required assistance to meet the balance of payment crisis, the IMF committed to give support under the Extended Fund Facility (EFF) as part of a bailout package.

According to available statistics, the authorities' extensive policy response to the COVID-19 epidemic helped minimize its human and financial repercussions, resulting in a solid economic recovery. The IMF acknowledged Pakistan's efforts in implementing the program "despite a tough environment" in a statement issued after conversations with Pakistani authorities. The IMF also praised Pakistan's progress in enhancing its anti-money laundering and counter-terrorist financing (AML/CFT) framework, but noted that more time was required to improve its efficacy. It anticipated that Pakistan's economic growth rate will reach or exceed 4% in the current fiscal year, and 4.5 percent in fiscal year 23, and that discussions with Pakistani officials would focus on strategies to promote long-term, stable growth. Pakistan should agree to the IMF's two criteria. It should raise electricity rates by up to 14 percent, or 1.68 per unit, and increase petroleum prices to the new historical level of 137.79 per litre.