Illustration (REUTERS / Akhtar Soomro)

Approved, USD 6 Billion Loan is Provided for Pakistan by IMF

Estella Claudia
Market & Investment
New Investment
Jul 04, 2019
1981
Pakistan - According to Reuters on Thursday (4/7), the executive board of International Monetary Fund (IMF) has approved a three-year USD 6 billion loan package for Pakistan and the loan disbursement will be carried out in stages. For the initial stage, the IMF executive board will disburse around USD 1 billion, while the remains will be distributed during the program period, which is three years and reviewed quarterly or every 3 months.

It is reported that the loan will be used by the IMF to control rising debt and prevent a balance of payments crisis that overshadows Pakistan.

Deputy Managing Director David Lipton stated that, this IMF program requires Pakistan's annual plan to strengthen their notoriously weak fiscal and tax systems, as well as large-scale reforms under Prime Minister Imran Khan's Government.
Through this foreign exchange reserves shrinking to only USD 7.3 billion, less than the equivalent of two months of imports and the budget deficit set above 7% of gross domestic product (GDP) this year, Pakistan faces a bitter pill to overcome the economic problems that have occurred many years and government has to find the solution for this economic issue.

According to the source, even though Pakistan's economy is dominated by agriculture and textiles, there are many large informal sectors that do not pay taxes as Pakistan has been pouring out money to defend its declining currency every day.
However, IMF requirements call for flexible market-determined exchange rates to help improve unsustainable current account deficits and make the industry more competitive, while trying to expand the tax base.

Source: https://www.cnnindonesia.com/ekonomi/20190704103648-532-408967/imf-beri-pinjaman-us-6-miliar-untuk-pakistan

Loan , Pakistan , IMF