Pakistan agreed to a $3 billion stand-by arrangement with the International Monetary Fund (IMF).
Nathan Porter, IMF Pakistan Mission Chief, announced that the IMF and Pakistani authorities agreed to a 9-month stand-by arrangement of $3 billion.
Porter stressed that this arrangement builds on the agreement made with Pakistan in 2019.
The stand-by arrangement with the IMF needs to be approved by the IMF Board of Governors in mid-July. The $3 billion loan spread over 9 months is higher than Pakistan’s expectation.
The Pakistani administration had hoped to release the remaining $2.5 billion from the $6.5 billion bailout agreed in 2019 and ended on Friday.
274 billion dollars in debt
Prime Minister Shahbaz Sharif, in a statement on Twitter, expressed his satisfaction with the realization of the agreement.
Sharif noted that this agreement will strengthen Pakistan’s foreign exchange reserves, ensure economic stability and put the country on the path of sustainable economic growth.
With a population of over 230 million, Pakistan’s national debt is around $274 billion, which corresponds to about 80 percent of its gross domestic product (GDP). This makes the country vulnerable to economic shocks.