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IMF approves USD7B loan program for Pakistan over 3 years
(MENAFN) The International Monetary Fund's Board of Directors has approved a new loan program worth USD7 billion over three years for Pakistan, which the country has promised will be the last time it seeks assistance from the global financial institution. According to a statement from the IMF, the loan aims to support Islamabad's efforts to strengthen its economy and create conditions for stronger, more inclusive, and sustainable growth.
Pakistan had initially agreed to the loan package in July, making this the 24th time the South Asian nation has received financial assistance from the IMF since 1958. The terms of the agreement included the implementation of a series of stringent reforms by Islamabad, the most notable of which is the expansion of its chronically narrow tax base. Although these reforms are essential, they have faced significant local opposition due to their unpopular nature.
The economic crisis in Pakistan reached a critical point last year when the country faced the risk of defaulting on its debts. The economy sharply contracted amid political upheaval and the devastating impact of the seasonal floods in 2022, which caused widespread destruction and further strained an already fragile economic system. Pakistan managed to avert default at the last moment thanks to financial assistance from friendly nations and a bailout package from the IMF.
Despite this temporary relief, Pakistan's public finances continue to face severe challenges. The economy is burdened by rampant inflation, massive public debt, and a long history of corruption, all of which have undermined efforts to achieve sustainable growth.
Pakistan had initially agreed to the loan package in July, making this the 24th time the South Asian nation has received financial assistance from the IMF since 1958. The terms of the agreement included the implementation of a series of stringent reforms by Islamabad, the most notable of which is the expansion of its chronically narrow tax base. Although these reforms are essential, they have faced significant local opposition due to their unpopular nature.
The economic crisis in Pakistan reached a critical point last year when the country faced the risk of defaulting on its debts. The economy sharply contracted amid political upheaval and the devastating impact of the seasonal floods in 2022, which caused widespread destruction and further strained an already fragile economic system. Pakistan managed to avert default at the last moment thanks to financial assistance from friendly nations and a bailout package from the IMF.
Despite this temporary relief, Pakistan's public finances continue to face severe challenges. The economy is burdened by rampant inflation, massive public debt, and a long history of corruption, all of which have undermined efforts to achieve sustainable growth.
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