Pak to get $6bn in IMF bailout over next three years
ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have agreed to a bailout package of nearly $6 billion over the next three years to meet foreign debt obligations, prime minister’s adviser on finance Abdul Hafeez Shaikh announced on Sunday. “After months of discussions and negotiations, a staff-level agreement has been reached between Pakistan and the IMF,” he told state-run PTV News. He said the agreement would show that effective reforms were underway in Pakistan.
Pakistan and the International Monetary Fund (IMF) have agreed to a bailout package of nearly $6 billion over the next three years to meet foreign debt obligations, prime minister’s adviser on finance Abdul Hafeez Shaikh announced on Sunday.
“After months of discussions and negotiations, a staff-level agreement has been reached between Pakistan and the IMF,” he told state-run PTV News. He said the agreement, which must still be approved by the IMF board of directors in Washington, would show that effective reforms were underway in Pakistan. “The Pakistani authorities and the IMF team have reached a staff level agreement on economic policies that could be supported by a 39-month Extended Fund Arrangement (EFF) for about US $6 billion,” an IMF press release quoted IMF mission chief for Pakistan Ernesto Ramirez Rigo as saying.
The facility aims to support Pakistani authorities’ “strategy for stronger and more inclusive growth by reducing domestic and external imbalances, removing impediments to growth, increasing transparency, and strengthening social spending”, the statement said.
It said financing support from Pakistan’s international partners will be “critical to support the authorities’ adjustment efforts and ensure that the medium-term programme objectives can be achieved”. Rigo added: “Pakistan is facing a challenging economic environment, with lacklustre growth, elevated inflation, high indebtedness, and a weak external position...The authorities recognise the need to address these challenges, as well as to tackle the large informality in the economy, the low spending in human capital, and poverty.”
“In this regard, the government has already initiated a difficult, but necessary, adjustment to stabilise the economy, including thorough support from the State Bank of Pakistan. These efforts need to be strengthened,” he added.