IMF has approved a $7 billion bailout package for Pakistan to help stabilize the country’s economy. The bailout program will last for 37 months, and the first installment of $1.1 billion has already been approved for release. The funds are expected to be transferred to Pakistan by September 30.
According to the Ministry of Finance, the loan will come with an interest rate of less than 5%, which is a manageable rate for the country. The approval for this package was granted during a meeting of the IMF Executive Board in Washington, where Pakistan’s financial situation was a major focus of discussion.
This bailout package is part of the IMF’s ongoing support to Pakistan, aimed at addressing its financial challenges through loans. In return for the financial assistance, the Pakistani government has made several promises to implement important reforms.
One of the key promises includes efforts to significantly expand the country’s tax base, ensuring that more people and businesses contribute to the national tax system.
In addition to tax reforms, the government has also committed to privatizing state-owned organizations to make them more efficient and reduce the burden on the country’s finances. These reforms are essential conditions set by the IMF, and Pakistan will only receive the full $7 billion over the next three years if it follows through on these commitments.
The IMF’s financial support is seen as crucial for Pakistan to navigate its economic difficulties and address longstanding issues in its financial management, including low tax revenues and inefficiencies in state-run businesses.
The success of this package depends largely on the government’s ability to meet the conditions laid out by the IMF and introduce the necessary reforms to improve the country’s economic stability.
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