In Islamabad, Pakistan’s Finance Minister Muhammad Aurangzeb said on Saturday that the $7 billion aid package agreed with the IMF would bring macroeconomic stability to the cash-strapped country.
The International Monetary Fund announced a rescue package for more than three years late on Friday, giving a much-needed respite to a country facing chronic economic problems.
The program must be approved by the IMF’s executive board. The Washington-based international lender said in a statement that the agreement should enable Pakistan to “consolidate macroeconomic stability and create conditions for stronger, inclusive and resilient growth.”
The latest relief package follows the government’s promise to implement reforms, including a major effort to expand the country’s tax base, Dawn newspaper reported on Saturday.
Aurangzeb said it would help Pakistan achieve macroeconomic stability.
“We need to ensure structural reforms and achieve self-reliance in the areas of public finance, energy and state-owned institutions,” the finance minister told Geo News.
Pakistan’s economy has faced multiple challenges over the past few years, including the COVID-19 pandemic, the impact of the war in Ukraine, supply shortages that have fuelled inflation, and devastating floods that hit a third of the country in 2022, Dawn reported.
Pakistan’s dwindling foreign exchange reserves have left it in a debt crisis, forcing it to turn to international lenders for its first emergency loans in 2023.
“Building on the economic stabilization achieved under the 2023 Stand-By Arrangement, IMF staff and Pakistani authorities have reached a staff-level agreement on a 37-month Extended Fund Arrangement for approximately $7 billion,” the IMF statement said.
The Washington-based bank further said the new program is aimed at supporting authorities’ efforts to consolidate macroeconomic stability in the cash-strapped country and create conditions for stronger, inclusive and resilient growth.
The IMF also said that continued strong financial support from Pakistan’s development and bilateral partners is essential for the program to achieve its objectives.
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