Pakistan has secured a six-billion-dollar bailout package from the International Monetary Fund (IMF) to revive the South Asian economy which faces a balance-of-payment crisis.
The agreement was reached between Pakistan’s Finance Ministry and a visiting IMF mission in the capital Islamabad overnight Sunday after several rounds of negotiations.
The IMF would provide the financial assistance over a period of 39 months subject to the country’s adherence to the agreed economic reforms, Pakistan’s finance chief Hafeez Shaikh said.
Under the deal, Pakistan would give up central bank control of the currency to adopt a market-based exchange rate, privatise loss-making companies and end subsidies in power and agriculture sectors.
Shaik said the World Bank and the Asian Development Bank would provide up to three billion dollars in additional assistance in pursuance of the Fund deal.
The money would still be short of Pakistan’s total financing gap of 12 billion dollars, but the country is likely to receive cash boost from allies like China and wealthy Muslim nations in the Gulf.
”Pakistan is facing a challenging economic environment with lackluster growth, elevated inflation, high indebtedness and a weak external position,” the IMF said in a statement.
The economy of the nation with a population of 220 million has slid deeper into crisis since Prime Minister Imran Khan took over 2018.
Burgeoning fiscal and current account deficits and a dip in revenues from tax collection are at the heart of the crisis.
Pakistan has sought IMF bailouts several times but the conditions attached to the assistance are always unpopular.