IMF approves $7 billion loan for cash-starved Pakistan – Times of India

The International Monetary Fund (IMF)’s executive board has given the green light for a fresh $7 billion loan to Pakistan, a country grappling with financial challenges.
The announcement was made on Wednesday, over two months after the two parties had initially reached a consensus. Authorities stated that the loan, which will be disbursed to Islamabad over a period of 37 months, is intended to provide a much-needed boost to Pakistan’s wilting economy.
In a statement, Prime Minister Shehbaz Sharif praised the agreement, which his team had been working on with the IMF since June.He expressed gratitude to Kristalina Georgieva, the head of the IMF and her team, for the approval.
According to the IMF, the first tranche of the loan, amounting to approximately $1 billion, will be released immediately.
Financially relegated to the margin given the dwindling economic figures, revenue-starved Pakistan will get monetary respite to bring back its economy on track.
Earlier this month, Shehbaz Sharif said that “friendly” nations have helped Islamabad to meet the requirements necessary to secure the IMF bailout package — necessary for the nuclear-armed nation to end its chronic economic distress.
Last July, Sharif’s administration had secured a $7-billion loan from IMF on the condition that it would introduce stringent reforms to strengthen tax collection and increase revenue.
On the global lender’s demand, Islamabad had unveiled a tax-heavy budget last June to raise 13 trillion rupees by next year – a 40% increase from the current financial year.
There has also been a 20-30% tariff increase on electricity and other energy products, hitting the common man hard. Pakistan’s external debt obligations exceed $130 billion, with concerns raised by financial experts regarding the potential inflationary impact of the country’s debt-driven approach to fiscal deficit management.
Since joining the multilateral lender in 1950, Pakistan has secured 24 IMF bailouts, the latest being approved by the lender’s executive board and confirmed by necessary financing assurances from the country’s development and bilateral partners.