The IMF Executive Board has approved a $7 billion loan for Pakistan, aimed at providing financial relief over the next 37 months.
Pakistan is expected to receive its first installment of $1 billion by September 30, with a second tranche to follow within the same fiscal year.
Pakistani officials confirmed that all preconditions for the loan, including securing $2 billion in additional financing and consolidating $12.7 billion in debt, have been met. Key allies, including China, Saudi Arabia, and the UAE, have deferred Pakistan’s loan payments for a year.
As part of the IMF program, Pakistan has borrowed from international commercial banks at an unprecedented 11 per cent interest rate. The country is also tasked with increasing its tax-to-GDP ratio by 3%, targeting sectors like retail, exports, and agriculture.
Despite securing the loan, Pakistan faces ongoing financial challenges, with $100 billion in debt repayment due in the next four years and an additional $5 billion in external financing required within three years.
