The USD 7 billion aid package agreement reached with the IMF, according to Pakistan’s Finance Minister Muhammad Aurangzeb on Saturday, will assist in bringing macroeconomic stability to the cash-strapped nation. The aid package, which would be spread over more than three years, was announced late on Friday night by the International Monetary Fund (IMF), providing much-needed relief to the country that has been struggling with persistent economic problems.
The Executive Board of the IMF must approve the program. According to a statement from the Washington-based international lender, Pakistan should be able to “cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth” as a result of the agreement.
The government’s pledge to carry out reforms, including a significant endeavor to increase the size of the nation’s tax base, is what led to the most recent bailout package, the Dawn daily said on Saturday.
It would help Pakistan achieve macroeconomic stability, according to Aurangzeb.
The finance minister was cited by Geo News as saying, “We need to ensure structural reforms and bring self-sustainability in areas of public finance, energy, and state-owned institutions.”
According to the Dawn, Pakistan’s economy has encountered several obstacles in recent times, including the COVID-19 epidemic, the aftermath of the conflict in Ukraine, supply constraints that exacerbated inflation, and the catastrophic flooding that struck a third of the nation in 2022.
Pakistan’s foreign currency reserves were depleting due to a financial problem, therefore the country was obliged to turn to an international lender, where it received its first emergency loan in 2023.
According to the release, “Building on the economic stability achieved under the 2023 Stand-by Arrangement (SBA), IMF staff and the Pakistani authorities have reached a staff-level agreement on a 37-month Extended Fund Facility Arrangement (EFF) of about USD 7 billion.”
The Washington-based lender went on to say that the new initiative is intended to assist government efforts to fortify macroeconomic stability and establish the framework for more robust, inclusive, and resilient growth in the nation struggling with financial difficulties.
The IMF added that the program’s success will depend on Pakistan’s development and bilateral partners providing consistent, substantial financial support.