The International Monetary Fund (IMF) has announced new conditions for a $7 billion loan to Pakistan, as reported by InSHort News.
On September 25, the IMF Executive Board approved a 37-month Extended Fund Facility (EFF) aimed at bolstering Pakistan’s economic stability and growth.
This arrangement focuses on essential policy objectives, including sustainable public finances, inflation reduction, and enhanced external buffers.
In a comprehensive report detailing the loan agreement, the IMF urged the Pakistani government to stabilize the macroeconomic environment in alignment with the terms of the loan.
The IMF’s requirements include implementing economic reforms and creating favorable conditions for the private sector to stimulate growth.
Additionally, Pakistan has been called upon to broaden its tax base, reduce government expenditures, and accelerate reforms in state-owned enterprises.
The IMF projects Pakistan’s GDP growth to hover between 4% and 4.5% from FY2024-25 to 2029-30, with inflation expected to range from 6.6% to 9%. The international lender emphasized the importance of executing the proposed economic reforms.
On September 27, Pakistan received the first tranche of the loan following the IMF Executive Board’s approval, with the State Bank of Pakistan (SBP) receiving SDR 760 million, equivalent to approximately $1.03 billion.