Pakistan likely to receive IMF loan tranche in early May

The IMF’s Executive Board is scheduled to meet on May 9, during which a final decision will be made regarding the disbursement of a $1.1 billion loan tranche to Pakistan. This follows the staff-level agreement between the IMF and Pakistan reached in March, with the final approval expected in the upcoming meeting. The announcement of the IMF board meeting had a positive impact on Pakistan’s stock market, which saw a slight recovery of 135 points following an initial dip of 500 points. The PSX had opened on a bearish sentiment this week amid Pakistan-India tension after the deadly attack in Pahalgam area of Indian Illegally Occupied Jammu and Kashmir (IIOJK). The IMF's agreement includes climate financing worth $1.3 billion, as well as an additional 28-month programme, which will bring the total financial support to Pakistan to $2.3 billion. The IMF and Pakistani authorities have also agreed on the implementation of the Resilience and Sustainability Facility to address the country’s long-term challenges, including climate risks and energy sector reforms.According to the IMF, Pakistan’s government has committed to continuing its economic reforms, including efforts to reduce public debt sustainably and improve resilience against natural disasters. The IMF also highlighted the need for continued efforts to improve water usage and environmental goals, as well as plans for enhanced investment and budgetary measures to address climate challenges. Despite improvements in economic activity, the IMF warned that risks to the country’s economy remain, including geopolitical tensions, rising global financial conditions, and fluctuations in commodity prices. The IMF has stressed the importance of maintaining fiscal discipline, with emphasis on not exceeding the approved budget for the year.