WASHINGTON (AFP) – The International Monetary Fund (IMF) on Wednesday approved a USD6 billion, three-year loan for Pakistan to help right the South Asian nation’s economy.
With the IMF board’s approval, the fund released USD1 billion to Pakistan immediately and will unlock from other international partners around USD38 billion over the programme period.
The IMF said in a statement the programme aims to “support the authorities’ economic reform programme” and to help “reduce economic vulnerabilities and generate sustainable and balanced growth.”
The fund will review Pakistan’s performance on a quarterly basis over 39 months, phasing release of the additional aid over time.
The government agreed on the loan programme last month and announced plans to slash civil expenditures and freeze military spending while promising to substantially raise revenues to stem a yawning fiscal deficit, and pledging to collect USD36 billion in taxes.
Discontent is simmering in the country following repeated devaluations of the rupee, soaring inflation, and increasing utility costs, while tax collection has been a long-standing challenge for authorities.
“Pakistan is facing significant economic challenges on the back of large fiscal and financial needs and weak and unbalanced growth,” Acting IMF Chief David Lipton said in a statement.
The programme “aims to tackle long-standing policy and structural weaknesses, restore macroeconomic stability, catalyse significant international financial support and promote strong and sustainable growth.”