Pakistan: Request for a Stand-by Arrangement-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Pakistan

IMF Staff Country Reports, July 18, 2023

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Canonical URL: Pakistan: Request for a Stand-by Arrangement-Press Release; Staff Report; Staff Statement; and Statement by the Executive Director for Pakistan

This paper presents Pakistan’s Request for a Stand-By Arrangement.
Pakistan’s economic reform program aims to support immediate efforts to stabilize the economy and guard against shocks while creating the space for social and development spending to help the people of Pakistan.
Steadfast policy implementation will be critical for Pakistan and the success of the program.
Key requirements highlighted include greater fiscal discipline, a market-determined exchange rate to absorb external pressures, and further progress on reforms related to the energy sector, climate resilience, and the business climate.
A market-determined exchange rate is described as critical to absorbing external shocks, reducing external imbalances, and restoring growth, competitiveness, and buffers.
Accelerating structural reforms is necessary to:
- build climate resilience,
- enhance safety nets,
- strengthen governance, including of state-owned enterprises,
- improve the business environment by creating a level playing field for investment and trade,
- enable job creation and raise inclusive growth.

Stabilization and shock absorption
- Emphasizes immediate stabilization efforts and guarding against shocks.
- Highlights the role of a market-determined exchange rate in absorbing external pressures and shocks.
Fiscal policy and governance
- Calls for greater fiscal discipline.
- Stresses strengthening governance, including oversight of state-owned enterprises.
Structural and sectoral reforms
- Prioritizes reforms in the energy sector and measures to build climate resilience.
- Recommends improving the business climate to foster investment, trade, and job creation.
Social and development priorities
- Seeks to create fiscal space for social and development spending aimed at helping the people of Pakistan.
- Emphasizes enhancing safety nets to support inclusive growth.

Implement steadfast policies to ensure program success.
Enforce greater fiscal discipline.
Adopt and maintain a market-determined exchange rate.
Advance reforms in:
- the energy sector,
- climate resilience measures,
- the business environment to level the playing field for investment and trade.
Strengthen governance, including governance of state-owned enterprises.
Accelerate structural reforms to support job creation and inclusive growth.