The International Monetary Fund logo is seen outside the headquarters building in Washington, US.
Credit: reuters Photo
The International Monetary Fund’s board (IMF) on Wednesday approved a $7 billion Extended Fund Facility (EFF) for cash-strapped Pakistan, providing a critical boost to the country’s struggling economy.
The development was announced by the Prime Minister’s Office (PMO) while a statement is expected from the IMF. The PMO said the premier expressed his satisfaction with the programme’s approval.
"The implementation of economic reforms is going on rapidly,” he said, adding that the government would continue to work hard to achieve goals related to economic development after achieving economic stability.
The prime minister said the increase in business activities and investment in the country was “welcome and a testament to the hard work of the economic team,” Dawn newspaper reported.
“Along with the successes on the diplomatic front, the increase in remittances from Pakistanis living abroad is a reflection of their confidence in the government’s policies,” he said, adding that the government was grateful to the Pakistani community.
“If the same hard work continues, God willing, this will be Pakistan’s last IMF programme,” Shehbaz said.
The $7 billion bailout package was approved after Pakistan promised to overhaul its agriculture income tax, transfer some fiscal responsibilities to provinces and take the most expensive loan in the nation’s history, the Express Tribune reported.
The first tranche of $1.1 billion is likely to be released by September 30, 2024, Geo News reported.
The interest rate on loans is less than 5 per cent, according to sources in the Ministry of Finance, and the IMF may disburse the second instalment within this fiscal year.
Confirming the development, State Bank of Pakistan (SBP) Governor Jameel Ahmed said that Islamabad would receive the first tranche of $1.10 billion, adding that the country has fulfilled all demands of the global lender, the report said.
Prime Minister Shehbaz, in a statement issued from the sidelines of the UN General Assembly in New York, voiced satisfaction over the approval of the loan programme and thanked IMF Managing Director Kristalina Georgieva and her entire team.
He also thanked the friendly countries, particularly Saudi Arabia, China, and the United Arab Emirates (UAE), for helping Pakistan secure the bailout package.
Saying that the implementation of economic reforms is vigorously underway, the premier said that the government would continue to work hard to achieve goals related to economic development after reaching stability.
The cash-strapped country had to undertake a slew of measures demanded by the IMF, including broadening the tax next, enforcing tax on agricultural income, and increasing the electricity and natural gas prices.