The IMF board has finally approved a $7 billion package, with the first tranche already disbursed. Economic stabilization appears to be secured. However, this is neither the first IMF programme nor likely the last. What differentiates this one is that it is starting at a time when the economy has already stabilized, unlike previous instances where the IMF stepped in during full-blown crises.

Strong fiscal and monetary tightening, along with efforts to curb the growth of energy circular debt by significantly raising tariffs, has already put the economy on the IMF’s typical path. Now, the Fund’s role is mainly to provide reassurance, monitoring the continuation of macro-prudential policies to ensure other avenues of financing become available. However, this oversight may not address the chronic structural issues plaguing the economy.

The fear of default has subsided. Fiscal balance is on the path to correction, the current account is expected to turn into a surplus, inflation has dropped to single digits, and interest rates are expected to follow. The currency is likely to remain stable. Excessive taxation, coupled with falling commodity prices, supports the........

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