IMF Grants $7 Billion Funding Agreement to Pakistan | Business and Economic Updates

The International Monetary Fund has approved a new $7bn loan for Pakistan, more than two months after the two sides reached an agreement. Prime Minister Shehbaz Sharif thanked the IMF for the approval and stated that the country had fulfilled all of the lender’s conditions with the help of China and Saudi Arabia. Pakistan’s external debt stood at over $130bn, with nearly 30 percent owed to China, and the country is due to repay almost $90bn over the next three years. Rollovers or disbursements of loans from allies, along with financing from the IMF, have helped Pakistan meet its external financing needs. The government has committed to increasing tax intake in line with IMF requirements, despite protests over new tax schemes and high electricity rates. Pakistan has faced economic challenges for decades, leading to numerous IMF bailouts. The latest economic crisis, which saw the country facing high inflation and a potential sovereign default, has improved slightly. Credit ratings agency Moody’s has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings, citing better macroeconomic conditions and government liquidity. The approval of the IMF loan will help Pakistan stabilize its economy and meet its financial obligations in the coming years.

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