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

Pakistan’s economy was buffeted by significant shocks over the past year. The severe impact of the floods, the commodity shock from the war in Ukraine, and the tightening of external and domestic financing conditions together with policy backsliding aggravated economic conditions and halted the post-pandemic recovery. Growth stalled, inflation surged, international reserves dropped to very low levels, and fiscal and external pressures have become acute. Despite some efforts in FY23H2, the difficult economic, social, and political environment as well as insufficient external financing, have prevented sufficient progress in completing the Extended Fund Facility (EFF) which expired on June 30. To address the challenges and sustain macroeconomic stability, the authorities have renewed their policy efforts, and are seeking support under a new Stand-By Arrangement.