The International Monetary Fund (IMF) has approved a $7 billion Extended Fund Facility (EFF) for Pakistan, following the nation’s commitment to implementing fiscal and monetary reforms aimed at stabilizing its economy. Prime Minister Shehbaz Sharif expressed satisfaction with the approval and thanked Saudi Arabia, the UAE, and China for their support in securing the package.
The IMF’s decision comes after a staff-level agreement was reached in July, with the loan marking Pakistan’s 25th IMF program since 1958. The loan aims to broaden the tax base, ensure a level playing field for investment, and improve human capital. Sharif expressed hope that if economic reforms continue, this could be Pakistan’s last IMF bailout.
Economists view the loan approval as a positive development, likely to boost investor confidence and assist Pakistan in securing further financial support from international markets and institutions. Senior economist Dr. Khaqan Hassan Najeeb noted that the program would help Pakistan meet its gross financing needs of $26 billion and provide breathing space for necessary structural reforms.
Ahsan Mehanti, CEO of Arif Habib Corporation, emphasized the benefits for Pakistan’s stock market and currency stability, predicting a rise in investor confidence and the potential activation of a $2 billion loan from the Asian Development Bank.
The IMF, while acknowledging Pakistan’s progress, highlighted ongoing challenges such as weak governance and a difficult business environment. IMF Managing Director Kristalina Georgieva praised the country’s economic reforms, noting that growth is improving and inflation is decreasing.
The IMF program is expected to enhance Pakistan’s macroeconomic stability, allowing the country to strengthen its economy and avoid future reliance on IMF assistance.
