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The
loan — which Islamabad will receive in installments over 37
months — is aimed at boosting Pakistan's ailing economy,
officials added.
Prime Minister Shehbaz Sharif in a statement hailed the deal
that his team had been negotiating with the IMF since June. He
thanked Kristalina Georgieva, the head of the IMF and her team,
for the approval.
The global lender said its immediate disbursement will be about
$1 billion.
In a statement issued Thursday, it praised Pakistan for taking
key steps to restore economic stability. Growth has rebounded,
inflation has fallen to single digits, and a calm foreign
exchange market have allowed the rebuilding of reserve buffers.
But it also criticized authorities. The IMF warned that, despite
the progress, Pakistan’s vulnerabilities and structural
challenges remained formidable.
It said a difficult business environment, weak governance, and
an outsized role of the state hindered investment, while the tax
base remained too narrow.
“Spending on health and education has been insufficient to
tackle persistent poverty, and inadequate infrastructure
investment has limited economic potential and left Pakistan
vulnerable to the impact of climate change,” it warned.
The development comes more than two months after the IMF reached
a staff-level agreement with Pakistan for the new loan. It also
came a day after officials said the global lender's executive
board would approve the loan on Wednesday, adding that Pakistan
had met all the conditions set by the lender.
Pakistan for decades has been relying on IMF loans to meet its
economic needs.
Sharif thanked China and other friendly countries for
facilitating Pakistan's deal with the IMF.
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