Islamabad: The IMF approved a loan of USD 1.3 billion for Pakistan to address climate change while also reaching a staff-level agreement on the first review of the already agreed USD 7 billion loan.
The new agreement spans over 28 months under the Climate Resilience and Sustainability Facility which aims to help nations address climate challenges while committing to reforms.
Additionally, freeing USD 1 billion for the country under the USD 7 billion bailout programme would bring the total disbursements to USD 2 billion.
"The IMF team has reached a staff-level agreement (SLA) with the Pakistani authorities on the first review of the 37-month extended arrangement under the Extended Fund Facility (EFF), and on a new 28-month arrangement under the IMF's (Resilience and Sustainability Trust) with total access over the 28 months of around USD 1.3 billion," Nathan Porter, mission chief to Pakistan, said on Tuesday.
"Upon approval (by the IMF board), Pakistan will have access to about USD 1 billion under the EFF, bringing total disbursements under the programme to about USD 2 billion," he added.
Pakistan Prime Minister Shehbaz Sharif praised his team for the "positive development." "This was achieved through teamwork, no doubt," he said.
Sharif further said that politicians from the opposition had questioned if the government would be able to convince the IMF without a mini-budget. "With God's grace, the mini-budget did not come," he said.
He acknowledged that the people faced difficulties as the government persevered to fulfill the conditions set by the IMF.
"Particularly, the common people who faced difficulties, if their sacrifices weren't there, the staff-level [agreement] would not have been possible as they face the burden of inflation," he added.
According to Radio Pakistan, the two agreements giving access to about 2 billion dollars is a "testament to Pakistan's significant strides in economic reforms, focusing on tax equity, monetary stability, energy sector transformation, and climate resilience." The IMF in its statement also appreciated Pakistan for its efforts to bring stability.
"Over the past 18 months, Pakistan has made significant progress in restoring macroeconomic stability and rebuilding confidence despite a challenging global environment," Porter said in a statement by the Fund.
He stated that while economic growth remains moderate, inflation has declined to its lowest level since 2015, financial conditions have improved, sovereign spreads have narrowed significantly and external balances are stronger.
The approval of a fresh loan and endorsement to release a second tranche under EFF would help Pakistan to address the issue of climate change and the balance of payments.
(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)
