IMF approves $6-billion loan for Pakistan, $1 billion to be disbursed immediately

The International Monetary Fund on Wednesday approved a $6-billion (approximately Rs 41,314 crore) loan to be disbursed over a period of three years to Pakistan.

The loan will support Pakistan’s economic plan, “which aims to return sustainable growth to the country’s economy and improve the standards of living”, said IMF spokesperson Gerry Rice.

“The Executive Board’s approval allows for an immediate disbursement of SDR716 million [or about US$1 billion],” the IMF said in a statement. “The remaining amount will be phased over the duration of the program, subject to four quarterly reviews and four semi-annual reviews.”

The loan programme will help Pakistan reduce economic vulnerabilities, generate sustainable and balanced growth, the IMF said. Pakistan had reached an agreement with the International Monetary Fund for the $6-billion bailout package in May.

Abdul Hafeez Shaikh, adviser to the prime minister of Pakistan on finance, said the IMF’s loan was a “testament to Pakistan government’s resolve for ensuring financial discipline and sound economic management”.

He said the country’s economic reform programme supported “broad based growth by reducing imbalances in the economy”. “Social spending has been strengthened to completely protect vulnerable segments,” he said on Twitter. Shaikh said the structural reform agenda included improving public finances and reducing public debt through revenue reforms.

Pakistan has received billions of dollars in financial packages from China, Saudi Arabia and the UAE during the current fiscal year, according to PTI. In June, it secured a $3-billion bailout package from Qatar.