IMF deal reviving investor confidence: PM

ISLAMABAD:

Prime Minister Shehbaz Sharif congratulated the nation on Monday saying that the confidence of investors and the business community is being restored rapidly, thanks to a major breakthrough in the standby agreement with the International Monetary Fund (IMF).

The premier said that the extraordinary surge of 2,231 points at the Pakistan Stock Exchange on the opening day of the week was the product of the "consistent hard work" and "correct policies" of the government.

Earlier, the premier had announced that the global money lender had finally reached a staff-level pact with Pakistan on a $3 billion stand-by arrangement --a decision long awaited by the country which is teetering on the brink of default.

Although essentially a bridge loan, it offers much respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.

Notably, the programme is expected to make the required foreign exchange available to reopen imports, help listed companies to gradually ramp up the partially closed production and reenergise economic activities in the country.

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The new programme has signalled other donor agencies and friendly countries to extend new financing to Islamabad as they pledged $9 billion at a Geneva meeting in January 2023.

The inflows would also boost foreign exchange reserves and allow the cash-strapped country to prepare for reopening imports.

The market had remained locked in the range of 40,000-42,000 points for the past few months amid the partial closure of the domestic economy.

The critically low foreign exchange reserves at $3.5 billion had peaked at risk of default which now receded in the short to medium run amid the revival of the IMF programme.

It, however, remains to be seen whether the market will sustain the historical single-day gains in the short-run at a time when the central bank's key policy rate stands at a record high of 22% at present.

Nonetheless, in a statement issued today, the premier said that "hope has been revived as the country is on the path towards development once again."

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Linking the revival of investors' confidence with the IMF deal, Shehbaz said that "once again the country is on track to development and prosperity as envisioned by [PML-N] leader Nawaz Sharif."

"We are once again paving the way for Pakistan's prosperity the way we had freed the country from the energy crisis, terrorism and other problems between 2013 and 2018 and ushered in economic development," he added.

Shehbaz stressed the need to continue working in the same direction with continued dedication and commitment.

"We are returning to the time when, under Nawaz Sharif's leadership, we had launched CPEC, restored the economy, lowered the inflation rate to four per cent and lifted the growth rate to 6.1 per cent against a policy rate of 6.5 per cent," said Shehbaz.

The PM said that the government planned to accelerate growth in all other sectors including agriculture, IT and industry.

"God willing," he said, "we will protect people from inflation and provide the youth with employment and business opportunities to reach self-sufficiency."