IMF Releases $1 Billion; Deal Opens Up Door to Other Global Lending Orgs.
PKONWEB — The International Monetary Fund (IMF) has released $1 billion to Pakistan immediately and said the 39-month $6 billion loan program aims to “support the authorities’ economic reform program” and to help “reduce economic vulnerabilities and generate sustainable and balanced growth.”
The IMF supported program is also expected to integrate broader support from multilateral and bilateral creditors in excess of US $ 38 billion over the program period, which is crucial for Pakistan to meet its large financing needs in the coming years.
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The IMF Executive Board in its meeting held on July 3, approved the US$6 billion Extended Fund Facility (EFF) arrangement for Pakistan to support the country’s fiscal and economic reform program, a statement by IMF said on Thursday.
The lending institution stated that Pakistan’s economy is at a “critical juncture” and that financial and economic stability could be at risk if urgent policy action is not taken.
Pakistan’s economy needs to reduce public debt and build resilience, it said. Comprehensive efforts are needed to drastically increase revenue mobilization by four to 5% of GDP at the federal and provincial levels over the three-year period, the IMF said.
The Fund also discussed the importance of strengthening institutions, increasing governance and transparency, and promoting an investment-friendly environment.