The International Monetary Fund has according to media reports approved a $6 billion loan over a period of three years for cash-strapped Pakistan, aimed at returning sustainable growth to the country’s fragile economy and improve the standards of living.
Pakistan’s finance ministry approached the International Monetary Fund in August 2018 for a bailout package when the Imran Khan government took over.
“IMF Executive Board approved today a three-year $6 billion loan to support #Pakistan’s economic plan, which aims to return sustainable growth to the country’s economy and improve the standards of living,” IMF spokesperson Gerry Rice tweeted on Wednesday.
The $6 billion financial aid includes an immediate disbursement of $1 billion to help Pakistan address its balance of payment crisis.
“The remaining amount will be phased over the duration of the programme, subject to four quarterly reviews and four semi-annual reviews,” the IMF said in a statement.
The IMF Executive Board “approved a 39-month extended arrangement” under the Extended Fund Facility for Pakistan for $6 billion to support its economic reform programme, it said.
“The EFF-supported programme will help Pakistan to reduce economic vulnerabilities and generate sustainable and balanced growth focusing on: a decisive fiscal consolidation to reduce public debt and build resilience while expanding social spending; a flexible, market-determined exchange rate to restore competitiveness and rebuild official reserves; to eliminate quasi-fiscal losses in the energy sector; and to strengthen institutions and enhance transparency,” the statement added.
Meanwhile, Dr Abdul Hafeez Shaikh, Advisor to Pakistan prime minister on Finance, in Islamabad said the IMF’s move is a testimony of the government’s resolve to ensure financial discipline and sound economic management in the country.
In a tweet, he said the IMF granted the loan to support Pakistan’s economic reform programme.