imf-approves-7bn-bailout-for-pakistan-1-1bn-due-soon

The International Monetary Fund (IMF) on Wednesday approved a $7 billion Extended Fund Facility (EFF) for cash-strapped Pakistan, providing a crucial lifeline to the country's struggling economy.

The announcement came from the Prime Minister’s Office (PMO), with a statement from the IMF expected soon. Prime Minister Shehbaz Sharif expressed satisfaction with the approval, calling it a key step towards stabilising Pakistan’s economy.

"The implementation of economic reforms is proceeding rapidly," he said, adding that the government remains committed to achieving its economic development goals after stabilising the economy.

The prime minister also highlighted the rise in business activity and investment in the country, crediting his economic team for their efforts. He noted the increase in remittances from overseas Pakistanis as a sign of confidence in the government's policies, according to Dawn newspaper. 

“God willing, if the same hard work continues, this will be Pakistan’s last IMF programme,” Shehbaz said.

The bailout, approved after Pakistan agreed to implement various economic reforms, including overhauling its agricultural income tax and shifting fiscal responsibilities to provinces, marks the largest loan package in the nation's history, The Express Tribune reported.

The first tranche of $1.1 billion is expected to be released by September 30, 2024, *Geo News* reported. The loan carries an interest rate of less than 5%, according to the Ministry of Finance, with a second instalment likely to be disbursed within the current fiscal year.

State Bank of Pakistan (SBP) Governor Jameel Ahmed confirmed that Islamabad has met all IMF conditions and will receive the first tranche of $1.1 billion.

Speaking from the sidelines of the UN General Assembly in New York, Prime Minister Shehbaz thanked IMF Managing Director Kristalina Georgieva and her team for their support. He also expressed gratitude to friendly nations, particularly Saudi Arabia, China, and the United Arab Emirates (UAE), for their assistance in securing the bailout package.

Pakistan has had to implement a series of tough measures required by the IMF, including expanding its tax base, enforcing taxes on agricultural income, and increasing the prices of electricity and natural gas.