The International Monetary Fund has approved a new $7bn loan for Pakistan after more than two months of negotiations. Prime Minister Shehbaz Sharif praised the deal and thanked the IMF for their approval. The loan program is expected to last 37 months and aims to help Pakistan with its economic challenges.
Pakistan’s external debt currently stands at over $130bn, with a significant portion owed to China. The country is facing pressure to repay almost $90bn over the next three years, with a major payment due in December. Pakistan’s allies, including China and Saudi Arabia, have provided assistance to help secure the IMF loan.
The government has committed to increasing tax revenue in line with IMF requirements, despite opposition from some groups over new tax schemes and high electricity rates. Pakistan has a history of economic struggles, leading to numerous IMF bailouts over the years. The latest economic crisis has been particularly challenging, with high inflation and the country facing the threat of a sovereign default.
However, there have been some positive developments, with inflation decreasing and credit ratings agency Moody’s upgrading Pakistan’s debt ratings. The IMF loan is seen as a crucial step in helping Pakistan stabilize its economy and avoid a financial crisis.
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