IMF approves $6bn bailout package for Pakistan

By APP

ISLAMABAD: The Executive Board of the International Monetary Fund (IMF) on Wednesday approved a 39-month extended arrangement under the Extended Fund Facility (EFF) for Pakistan for $6 billion to support the country’s economic reform programme.

The board’s approval allows for an immediate disbursement of US$1 billion, an IMF statement said. The remaining amount will be phased over the duration of the program, subject to four quarterly reviews and four semi-annual reviews.

“The EFF-supported programme will help Pakistan to reduce economic vulnerabilities and generate sustainable and balanced growth, focusing on a decisive fiscal consolidation to reduce public debt and build resilience, while expanding social spending; a flexible, market-determined exchange rate to restore competitiveness and rebuild official reserves; to eliminate quasi-fiscal losses in the energy sector; and to strengthen institutions and enhance transparency,” the statement said.

Adviser to Prime Minister on Finance, Revenue and Economic Affairs, Abdul Hafeez Sheikh said on Wednesday the IMF package would help safeguard economic condition of the country. In a statement, he further said the loan approved by the IMF Executive Board would bring economic stability.

Earlier, it was reported that the final budget measures passed by the assembly, along with a report on compliance with all prior actions, would be the key elements in the IMF board’s decision to grant the request by Pakistan for a bailout facility. The approved version of the budget and finance bill are expected to be transmitted to the fund.

The Pakistani government in its budget proposals for the next financial year, on the other hand, has already added Rs357 billion loan from the IMF. An IMF team is set to visit Islamabad every three months to review the country’s economic indicators. Pakistan had already fulfilled all of the IMF’s conditions before signing of the agreement, sources had said earlier.

The Cabinet’s Economic Coordination Committee (ECC) has given the approval to jack up the natural gas prices, which was one of the IMF’s conditions for its bailout package. It also approved a hike in the natural gas tariff for domestic consumers by 190 per cent and, on average, 31 per cent for all other categories.

—APP/News Desk