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Pakistan Economy: IMF approves Final Bailout Tranch

ANM Desk

The International Monetary Fund (IMF) has given the green light for the release of the last portion of financial aid to Pakistan, providing a much-needed boost to the country’s struggling economy.

The decision, made by the IMF Executive Board, will see an immediate disbursal of $1.1 billion, marking the completion of the second and final review of Pakistan’s economic reform programme supported by the IMF’s Stand-By Arrangement (SBA).


Board Unanimously Approves Disbursement

Following thorough deliberation, all members of the IMF Executive Board voted in favor of releasing the final installment of financial assistance. However, India abstained from voting on this matter. The total disbursements under the SBA now tally around $3 billion, reflecting the IMF’s commitment to aiding Pakistan in stabilizing its economic trajectory.


IMF Stresses Need for Tough Measures

Highlighting the challenges ahead, IMF’s Deputy Managing Director Antoinette Sayeh underscored the importance of Pakistan seizing the opportunity to institute robust economic policies and structural reforms.

Sayeh emphasized the necessity for Pakistan to move beyond the current arrangement and implement measures aimed at fostering stronger, inclusive, and sustainable growth.


Focus on Structural Reforms

Sayeh outlined several key areas where Pakistan should concentrate its efforts, including accelerating structural reforms, safeguarding vulnerable segments of society through adequate social safety nets like the Benazir Income Support Programme, and enhancing the resilience of state-owned enterprises (SOEs).

Additionally, strengthening governance, combating corruption, and bolstering climate resilience were identified as priority areas for Pakistan’s economic agenda.


Call for Market-Determined Exchange Rate

In line with IMF recommendations, Sayeh stressed the importance of maintaining a market-determined exchange rate to absorb external shocks effectively. She also advocated for broader structural reforms to support robust and inclusive growth in Pakistan.

Furthermore, Sayeh emphasized the need for decisive action to address undercapitalized financial institutions and ensure financial stability.


Immediate Loan Payment

Pakistan is slated to receive the $1.1 billion loan payment this week, providing a much-needed infusion of liquidity to the country’s economy. This financial injection comes at a critical juncture as Pakistan grapples with various economic challenges exacerbated by the ongoing global uncertainties.

The approval of the final tranche of the IMF bailout package coincides with Prime Minister Shehbaz Sharif’s meeting with IMF Managing Director Kristalina Georgieva in Riyadh, Saudi Arabia.

During their discussions, Prime Minister Sharif reiterated Pakistan’s need for ongoing IMF support and expressed interest in securing another IMF programme to address the country’s lingering economic woes.


Outlook for Pakistan’s Economy

With the IMF’s continued backing and a renewed focus on implementing structural reforms, Pakistan aims to chart a path towards sustainable economic growth and stability.

However, the road ahead remains challenging, requiring concerted efforts from policymakers to navigate through existing hurdles and capitalize on emerging opportunities.

The approval of the final tranche of the IMF bailout package represents a significant milestone for Pakistan as it seeks to revitalize its economy and overcome pressing economic challenges. As the country prepares to embark on the next phase of its economic reform agenda, the IMF’s continued support, coupled with domestic resolve and sound policy implementation, will be crucial in driving Pakistan towards a path of sustained growth and prosperity.

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