International Monetary Fund Approves $3 Billion Bailout Program for Pakistan
New Delhi : The International Monetary Fund (IMF) has granted approval for a $3 billion bailout program aimed at aiding Pakistan's struggling economy. The funds, which will be disbursed in instalments, will provide immediate relief with an initial disbursement of approximately $1.2 billion.
Pakistan and the IMF had previously reached a staff level agreement in June, ensuring crucial financial support for the cash-starved nation. The recent approval from the IMF's board was necessary before the disbursement of the first tranche of funds.
In a statement, the IMF highlighted that the approved arrangement is a 9-month Stand-By Arrangement (SBA) for Pakistan. The total amount of SDR2,250 million, equivalent to about $3 billion or 111 percent of Pakistan's quota, will support the country's economic stabilization program.
The IMF acknowledged the challenging economic situation Pakistan currently faces, attributing it to a combination of factors such as a difficult external environment, devastating floods, and policy missteps. These issues have contributed to significant fiscal and external deficits, soaring inflation, and diminished reserve buffers throughout the fiscal year 2023.
The approved bailout program aims to address these economic challenges and assist Pakistan in stabilizing its financial situation. It is expected that the funds provided by the IMF will help alleviate some of the immediate pressures faced by the country, allowing it to implement necessary reforms and strengthen its economy in the long term.
Pakistan's government has welcomed the approval of the bailout program, recognizing the importance of the financial support in navigating the current economic difficulties. The authorities are determined to implement the prescribed stabilization measures to restore stability and growth.