WASHINGTON D.C. (The Thursday Times) — In a significant move to secure Pakistan’s economic recovery, the International Monetary Fund (IMF) has given final approval to a $7 billion loan program for Pakistan. The IMF’s executive board approved the arrangement on Wednesday, as confirmed by a statement from the prime minister’s office. This approval clears the way for the immediate disbursement of approximately $1.1 billion, according to Jameel Ahmad, the governor of Pakistan’s State Bank.
This crucial funding comes at a time when Pakistan is struggling to meet its financial obligations amid a dollar shortage that nearly pushed the country into an economic collapse. With approximately $26 billion in loan repayments due in the current fiscal year that began in July, the IMF’s support is seen as vital for maintaining Pakistan’s financial stability.
The loan program, initially announced in July, had been awaiting final approval from the IMF’s executive board. A deal was originally expected to be finalized in August, but negotiations extended, requiring Pakistan to implement several tough economic measures. To meet the IMF’s conditions, Pakistan raised its tax revenue target by a record 40% and implemented increases in energy prices, which contributed to delays in finalizing the agreement.
Moody’s Ratings and Fitch Ratings both upgraded Pakistan’s credit rating in late August, reflecting improved confidence in the country’s economic outlook. According to Moody’s, the IMF program introduces certainty to Pakistan’s financing needs for the next two to three years, providing a clearer path for managing its debt obligations and fostering a more sustainable recovery.
