Islamabad, 13 July 2023(TDI): Pakistan has been granted $3 billion by the International Monetary Fund (IMF) to support its economic reform program. The loan aims to help stabilize Pakistan’s economy and address its balance of payments crisis.
The IMF Executive Board approved a $3 billion Stand-By Arrangement for Pakistan 🇵🇰 to help stabilize the economy and guard against shocks, while creating the space for social and development spending to help the Pakistani people: https://t.co/0h6JyNhASu pic.twitter.com/1XHItxwMhm
— IMF Middle East & North Africa (@IMFinMENA) July 12, 2023
The Executive Board of the IMF approved this loan on July 12. Pakistan is going through severe economic turmoil with a strong risk of default.
Assistance at this crucial time is essential to prevent further deterioration of the country’s economy. The loan will also help regulate inflation in the country, which is approximately as high as 29.4%.
Pakistan is a country with a poverty rate of 21.9 percent, and the loan from the IMF will provide some relief to the vulnerable population.
This financial support from the IMF is expected to restore investor confidence and attract foreign investment, ultimately leading to a more stable and prosperous economy for Pakistan.
This amount will be released in three phases, with a payment of $1.2 billion on an immediate basis and the remaining amount after two quarterly reviews.
Pakistan’s Prime Minister, Shehbaz Sharif, expressed his gratitude to the Managing Director of the IMF, Kristalina Georgieva, and her team for this unwavering support.
Moreover, he praised the Ministry of Finance of Pakistan, especially Finance Minister Ishaq Dar, for their efforts in negotiating and securing the financial aid package from the IMF.
The PM said, “This assistance bolsters Pakistan’s economic position to overcome immediate- to medium-term economic challenges, giving the next government the fiscal space to chart the way forward.”
This financial assistance will enable the government to implement necessary structural reforms and strengthen its fiscal position, ultimately promoting sustainable economic growth in the country.
Pakistan has already gone through 23 programs of the IMF since its independence, indicating the country’s excessive dependence on external debt and the need for Pakistan to focus on developing its domestic resources and reducing its reliance on external borrowing.
The loan from the IMF will provide a temporary solution to immediate economic challenges, but Pakistan needs to work toward long-term economic stability by diversifying its economy and promoting self-sufficiency.