Pakistan To Get $6 Billion Bailout From IMF

After more than a month of negotiations, the International Monetary Fund has decided to revive a $6 billion bailout plan for Pakistan, providing a significant boost to the ailing economy, although the government still needs to implement important reforms. The IMF said Pakistan and Pakistan had reached a staff-level agreement on credit checks.

The government statement claims that IMF managing director Kristalina Georgieva and Prime Minister Shehbaz Sharif discussed on Tuesday. 

The two also got together last week in Paris on the fringes of an international banking gathering.

Later, the IMF's Islamabad program chief said that an agreement between the nations was almost complete.

The talks between Pakistan and the IMF ended in December after the international institution stalled the distribution of a $1.1 billion bailout. 

Imran Khan, Sharif's predecessor, agreed to the provisions of the agreement in 2019.

The agreement has a deadline: if the IMF deems that Pakistan has not cooperated with the provisions of the agreement by Friday, it can request that the bailout be terminated entirely. 

Nathan Porter, the IMF's head of staff in Islamabad, signaled that both sides were nearing a deal in a long-awaited statement hours after Pakistani Prime Minister Shahbaz Sharif met with the IMF chief to discuss reviving the bailout.

 In recent days, he claimed, the Pakistani government has "taken decisive action to better align policies with the International Monetary Fund's economic reform agenda," including "budget approval by Parliament."

 The national budget that was approved by Parliament this week "expands the tax base while making room for increased social and development spending, as well as measures to improve the functioning of foreign exchange markets and tighten monetary policy to reduce inflation," according to Porter, putting pressure on the balance of payments, which primarily affects the poor.

He stated that the IMF group was continuing in talks with Pakistani officials in order to "soon reach an agreement on IMF financial assistance." 

Porter's remarks were the clearest indication since December that Pakistan will get a major tranche of $1.1 billion before the bailout's expiration. 

Pakistan and the IMF, according to the agency, have differed over Islamabad's claimed failure to satisfy the terms of the bailout. Pakistan asserts that all requirements have been fulfilled.

The Pakistani government is now battling to avert bankruptcy with financial assistance from friendly countries such as China, Saudi Arabia, and the United Arab Emirates.

It is also mired in an economic crisis unprecedented since Sharif succeeded Khan, who was ousted in a vote of no confidence in Parliament last year.

Last summer's floods also hampered economic recovery, killing 1,739 people and causing $30 billion in damage.