KARACHI: The International Monetary Fund (IMF) has released approximately $1.03 billion to Pakistan following the final approval of a 37-month, $7 billion package under the Extended Fund Facility (EFF).
The State Bank of Pakistan (SBP) confirmed the receipt of approximately $1.03 billion (SDR 760 million) on Friday, providing crucial support to stabilize the country’s struggling economy.
Pakistan has been working to implement stringent conditions to complete the loan programme, initially agreed upon in July—a programme that Prime Minister Shehbaz Sharif has repeatedly expressed hope will be Pakistan’s last.
The IMF Executive Board approved the 37-month loan, marking a significant step in the economic support plan.
According to a statement from the SBP, these fresh inflows will be reflected in the central bank’s liquid foreign exchange reserves, with updated figures set to be released on Thursday, October 3, 2024.
Following the long-awaited approval, the IMF stated that the new programme would necessitate “sound policies and reforms” to enhance macroeconomic stability, address structural challenges, and ensure “continued strong financial support from Pakistan’s development and bilateral partners.”
Although Pakistan’s economy has stabilized since it nearly defaulted last summer, it remains heavily reliant on IMF bailouts and loans from friendly nations to manage its substantial debt, which consumes half of its annual revenues.
“There will be transitional pain, but if we want this to be the last programme, we must carry out structural reforms,” Finance Minister Muhammad Aurangzeb told the media.
The IMF also announced an “immediate disbursement” of around $1 billion.
“This past year has seen a very welcome return to economic stability in Pakistan,” IMF Pakistan mission chief Nathan Porter said. “The challenge now is to move beyond this renewed sense of stability toward stronger and sustained growth, with benefits shared more broadly and evenly across society.”
Speaking on the sidelines of the United Nations General Assembly in New York on Wednesday, Prime Minister Shehbaz Sharif credited the deal to the “tremendous support” of Saudi Arabia, China, and the United Arab Emirates.
“In the final phase of negotiations, the IMF’s conditions were linked to China. The support and strengthening we received from the Chinese government during this time is something I am truly grateful for,” he told reporters shortly before the deal was announced.
Read more: Shehbaz Sharif Calls for Two-State Solution to End Palestinian Conflict
