The International Monetary Fund’s (IMF) executive board has given approval for a USD 1.1 billion loan tranche for Pakistan, marking the conclusion of the second bailout package, as reported by Media.
This latest funding constitutes the third and final installment of a USD 3 billion standby arrangement with the IMF. It comes as a crucial lifeline for Pakistan to avert a sovereign default, especially with the existing arrangement slated to expire this month.
Following discussions in Washington, the IMF Executive Board endorsed Pakistan’s request for the release of funds. Insider reports indicate that Pakistan can anticipate receiving the loan disbursement promptly, likely as early as tomorrow (Tuesday), subsequent to the IMF’s authorization, as disclosed by ARY News.
Last month, Pakistan and the IMF reached a staff-level agreement on the final review of the USD 3 billion bailout package. The country has already received two tranches amounting to USD 1.9 billion, with USD 1.2 billion disbursed in July and an additional USD 700 million in January 2024.
Looking ahead, Pakistan is aiming for a new, more substantial IMF loan with an extended duration. Finance Minister Muhammad Aurangzeb has hinted at Islamabad potentially securing a staff-level agreement on the new program by July.
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The focus is on obtaining a loan spanning at least three years to fortify macroeconomic stability and enact much-needed structural reforms. However, the precise magnitude of the program remains undisclosed.
This development follows Pakistan Prime Minister Shehbaz Sharif’s meeting with IMF Managing Director Kristalina Georgieva, during which he reiterated his government’s commitment to revitalizing Pakistan’s economy.
In the meeting, held on the sidelines of the World Economic Forum Special Meeting, the Prime Minister underscored his administration’s dedication to implementing structural reforms, ensuring fiscal discipline, and pursuing prudent policies to foster sustained economic growth.
Expressing appreciation, the Prime Minister conveyed gratitude to Georgieva for the IMF’s assistance in securing the USD 3 billion Standby Arrangement last year.
