The International Monetary Fund or IMF has approved a $7 billion loan for Pakistan.
The country is set to receive the first $1 billion of the loan immediately with the balance to be paid over the next three years.
Pakistan’s Prime Minister, Shehbaz Sharif, welcomed the decision and thanked the head of the IMF, Kristalina Georgieva, and her team. Pakistan has taken more than 20 loans from the IMF since 1958, making it one of the top borrowers. As of now, Pakistan ranks fifth among the IMF’s debtors.
The IMF said, the program “will require sound policies and reforms” to stabilze and help make the economy more resilient. Pakistan has stated that it intends to avoid future borrowings from the IMF. In order to secure the loan, Pakistan has agreed to do away with several unpopular policies, such as raising taxes on individuals and corporations.
For decades, Pakistan has relied on the IMF for financial assistance to meet its economic obligations. Pakistan was on the brink of defaulting on its debts last year and had barely enough in foreign currencies to pay for a month of imports. As a part of the bailout measure, the IMF had approved a $3 billion bailout for Pakistan in July 2023. It also received funds from allies Saudi Arabia and the United Arab Emirates.
