Pakistan secures multi-billion IMF bailout amid lackluster growth

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Pakistan secures multi-billion IMF bailout amid lackluster growth

On Sunday, the 12th of May 2019, IMF (International Monetary Fund) officials said that Pakistan reached an agreement with IMF for a three-year-long, $6 billion bailout package in order to support its fragile economy and bolster its public finances.

In point of fact, the latest deal, which still needs approval from IMF board in Washington, would have been 13th bailout for Pakistan since 1980, while, Pakistan’s Finance Minister, Abdul Hafeez Shaikh had been quoted saying in a PTV television interview that it would be Pakistan’s last, although the comments seemed to entertaining the IMF officials, analysts suggested given the nation’s tumultuous political backdrop.

Besides, Pakistan’s inflation had surged more than 8 percent and its currency had lost one-third of its value over the course of past year, while its foreign exchange reserves had barely enough to support about two months of exports, which had forced the nation to seek IMF aid, analysts suggested.

In a Sunday (May 10th) statement, outlining the framework deal, IMF said, “Pakistan is facing a challenging economic environment, with lackluster growth, elevated inflation, high indebtedness, and a weak external position”.

Nevertheless, Pakistan had received a $10 billion funding from Saudi Arabia last February to support its public finances during a World Government Summit, which somehow gave birth to an India-Pakistan Kashmir border tension, while this time, IMF would more likely to ask for an out-and-out structural policy reform, analysts said.