IMF approved $7 billion bailout package for Pakistan.
The International Monetary Fund approved $7 billion bailout package for Pakistan.
An Executive Board meeting chaired by IMF Managing Director Kristalina Georgieva was held,Pakistan’s agenda at the top of the list.
According to Ministry of Finance sources,Pakistan will receive first installment of $1.1 billion by September 30. The second installment will come the same fiscal year after the loan program approval.The loan will be provided at an interest rate of less than 5%.
Earlier this month, IMF Director of Strategic Communications Julie Kozack informed journalists in Washington that the IMF had called for a board meeting after receiving assurances of necessary financial support from Pakistan’s development partners.
noted that on this year in july a staff-level agreement reached between IMF and Pakistan for a $7 billion loan program with a duration of 37 months.
The IMF said that this new loan program will enable Pakistan to achieve macroeconomic stability and strength.to create conditions for more development.
According to IMF statement that Pakistan will increase tax revenues by 1.5% of GDP in the current fiscal year, and tax collections will increase by 3% of GDP during the loan program period. The goal of achieving a 1% primary surplus approved in the budget must be met.
The IMF said that there will be a fair increase in direct and indirect taxes, while the agriculture, retail and export sectors will have to be brought into the regular tax net.
The purpose of program to bring sustainable economic stability to Pakistan. Improve public finances and reduce inflation are included in the objectives of new loan program. Under the program, foreign exchange reserves will improved also economic deficiencies will be addressed.
At the end of last month Pakistan had requested Saudi Arabia to increase its existing $5 billion portfolio by an additional $1.5 billion to help reduce the external financing gap necessary to obtain the IMF’s 37-month bailout package.
sources said that according to the prevailing procedure,friendly bilateral partners – Saudi Arabia,UAE and China,will have to confirm to the IMF through their executive directors regarding the rollover of their $12 billion loan given to Pakistan.
Due to Pakistan government efforts and the endeavors of the Ministry of Finance succeeded in convincing friendly countries for the loan amount.Prime Minister Shehbaz Sharif specially gives thanks friendly countries in his address after the cabinet meeting.
PM said that our talks with IMF are progressing well and if this program happens, we will take steps to increase our growth rate.
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