
Pakistan on Tuesday hailed the release of an additional USD 1.2 billion in loans from the International Monetary Fund (IMF).
The government stated the funds, intended to support the country's economic recovery and reforms program, are evidence of the "hard work" undertaken following two years of financial crisis.
The IMF approved the funds during a Washington meeting on Monday, bringing the total amount disbursed under two separate loan facilities—a general bailout fund and a climate sustainability fund—to USD 3.3 billion.
"Pakistan's reform implementation... has helped preserve macroeconomic stability in the face of several recent shocks" such as devastating flooding last summer, the fund's deputy managing director Nigel Clarke said in a statement.
Economic growth is projected to rise to 3.2 percent in the fiscal year to June 2026, after an estimated 3.0 percent last year.
Inflation meanwhile is set to average 6.3 percent this fiscal year, a huge drop from the 23.4 percent average in the year to June 2024.
But Clarke also called for further overhauls and privatisations of state-owned firms, and continued investment in climate projects to reduce "vulnerability to extreme weather events".
New efforts to combat endemic corruption are also needed, Clarke said, while welcoming a recent government-commissioned report on fraud as a "welcome step in accelerating government reforms".
In a statement, Prime Minister Shehbaz Sharif called the new loans "proof that Pakistan is implementing the necessary steps for economic stability and growth".
Pakistan nearly defaulted on its massive debt in 2023 before securing the IMF bailout, called the Extended Fund Facility, that is to total USD 7 billion in the coming years.
As part of the deal it also pledged to tackle corruption including money-laundering and alleged financing of terrorism in the country.
In November the IMF published a review conducted at the request of the Pakistani government, which found "persistent and widespread corruption risks embedded in a heavily state-dominated economy".
The South Asian nation is one of the largest debtors to the IMF after Argentina and Ukraine. It also secured a 10-year, USD 20 billion financing package from the World Bank in January.
Source: AFP




