Islamabad:The International Monetary Fund (IMF) has approved a new $7 billion bailout package for Pakistan under a 37-month Extended Fund Facility (EFF) program, emphasizing the need for comprehensive tax reforms. The IMF’s Executive Board highlighted the importance of expanding the tax base and effective tax management as key components for successful program implementation.
In a recent statement, the IMF confirmed the disbursement of $1 billion to Pakistan, stressing the need for strong policies to secure additional financial assistance and restore market access. The Board commended the steps taken towards a fair tax system and urged efforts to collect additional revenues through better tax management.
The IMF also noted that macroeconomic stability, critical reforms, and continuous support from Pakistan’s development and bilateral partners are essential for the program’s objectives. The new EFF program focuses on restoring policy credibility, enhancing macroeconomic policies, and advancing reforms to boost competitiveness and productivity.
According to the IMF, Pakistan’s economic outlook for fiscal year 2024 shows a growth rate of 2.4%, alongside a significant reduction in inflation. However, challenges such as a difficult business environment and limited tax base continue to hinder investment. Without comprehensive reforms, Pakistan risks falling further behind other nations.
Prime Minister Shahbaz Sharif had stated that this program should be seen as the last one needed for economic stabilization following the agreement reached in July.
