Pakistan Wins Initial IMF Deal for $3 Billion Bailout Program

Pakistan wins Initial approval from the International Monetary Fund (IMF) deal for the release of the next launch tranche from a $3 billion bailout program.

Pakistan has fulfilled the expectations of the IMF for the latest installment of a $3 billion bailout plan. It has increased the economic confidence just some months before the elections.

Pakistan secured initial approval from the IMF for the release of the next loan tranche from a $3 billion bailout program https://t.co/FG6nY0hdQm
— Bloomberg Economics (@economics) November 16, 2023

The Government of Pakistan announced that the IMF and the Pakistan Government have reached a staff-level agreement after reviewing its economic progress giving Pakistan access to about $3 billion in funding. The pact is subject to approval from the executive board of the IMF.

🔊IMF staff and the Pakistani authorities have reached a staff-level agreement on the first review under Pakistan's Stand-By Agreement (SBA), subject to approval by the IMF's Executive Board.@IMFNews @imf_pakistan @GovtofPakistan @ProPakistaniPK @PTVNewsOfficial @PakistanDMW pic.twitter.com/5lzxR6vpmi
— External Publicity Wing (@epwing_official) November 15, 2023

Pakistan Wins Initial IMF Deal for $3 Billion Bailout Program

IMF Managing Director Kristalina Georgieva praised the efforts of Pakistan to stick to the IMF program. However, the IMF stated in its review that fledgling recovery is underway, and Pakistan remains vulnerable to large external risks.

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Pakistan has to abide by the IMF program to increase tax collection, control its budget, and restore reserves. The next IMF review will take place in February which is the same month as Pakistan is due to hold elections on Feb 8, 2023.

The loans are important in preventing Pakistan from defaulting on its obligations after its foreign-exchange reserves decreased and its currency weakened. The government has been attempting to correct the economic imbalance by increasing petrol prices and tightening illegal dollar exchange.

The IMF agreement also helps the caretaker government of Pakistan led by Prime Minister Anwar ul Haq Kakar. Mr. Anwar is attempting to collect $6.3 billion in World Bank, Asian Development Bank, and Islamic Development Bank loans.