IMF approves $7 billion loan to cash-strapped Pakistan
The International Monetary Fund (IMF) has approved a 7 billion US dollar loan to cash-strapped Pakistan. The country is due to receive the first $1 billion of the loan immediately, with the balance to be paid out over the next three years.
Premier Shehbaz Sharif expressed gratitude for the IMF's decision, extending thanks to Kristalina Georgieva, the IMF's Managing Director, and her team for their support.
Pakistan has been a long-time recipient of IMF assistance, having taken more than 20 loans since 1958. It is currently ranked as the fifth-largest debtor to the global financial institution.
The IMF emphasized that this new loan program would necessitate 'sound policies and reforms' to stabilize the economy and build greater resilience.
Pakistan has committed that this will be its final loan from the IMF. As part of the agreement, the country has implemented several unpopular measures, including raising taxes on individuals and businesses.
Despite decades of IMF support, Pakistan has faced ongoing financial instability due to mismanagement. In 2022, the country was on the verge of defaulting on its debts, with barely enough foreign currency reserves to cover a month’s worth of imports.
In July 2023, the IMF approved a $3 billion bailout package for Pakistan. Additionally, the country received financial aid from its allies, including Saudi Arabia and the United Arab Emirates (UAE).
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