ISLAMABAD: Pakistan has received $700 million from the International Monetary Fund (IMF) as part of its bailout programme, State Bank of Pakistan (SBP) Governor Jameel Ahmed announced on Wednesday.
The loan was granted after the IMF Executive Board completed its first assessment last week, bringing the total amount disbursed under the $3 billion Standby Arrangement (SBA) to around $1.9 billion.
Following the board’s decision last week, Antoinette Sayeh, Deputy Managing Director and Chair, stated: “There are now preliminary signs of activity picking up and external pressures easing.”
The nine-month SBA, which was authorized by the Executive Board on July 12 last month, intends to provide a policy underpinning for resolving domestic and external balances, as well as a framework for multilateral and bilateral financial support.
To obtain the bailout, Pakistan enacted stringent IMF-requested reforms, including a restructured budget, a record interest rate hike, and significant hikes in energy and gas rates.
Under the bailout agreement, the IMF also required Pakistan to raise $1.34 billion in new taxes to cover fiscal adjustments. The measures fueled an all-time high inflation rate of 38% year on year in May, which remains over 30%.
“The government took difficult steps to bring electricity and natural gas prices closer to cost in 2023.” “Continuing with regularly scheduled adjustments and pushing cost-side power sector reforms are critical to improving the sector’s viability and fiscal sustainability,” Sayeh stated.
