IMF board approves $7bn loan programme for Pakistan

The International Monetary Fund (IMF) approved a $7 billion Extended Fund Facility (EFF) for Pakistan, with the first $1.1 billion likely to be released by September 30, 2024. The interest rate on the loan is less than 5%. Prime Minister Shehbaz Sharif expressed satisfaction over the approval of the loan and thanked IMF Managing Director Kristalina Georgieva, as well as friendly countries like Saudi Arabia, China, and the UAE for helping secure the bailout package. The government is committed to economic reforms and achieving stability. The IMF bailout package aims to achieve macroeconomic stability and has already shown improvements in inflation rates, policy rates, exchange rates, and foreign exchange reserves. The government is focused on structural reforms, tax reforms, energy sector reforms, and privatization. Pakistan secured external financing from Saudi Arabia, China, and the UAE to meet IMF approval requirements. The government presented a tax-loaded budget for the fiscal year 2024-25 to address the debt burden and improve revenue collection. IMF has also raised concerns about unresolved debt in Pakistan’s power sector.