Pakistan has secured substantial financial support from China, Saudi Arabia, and the United Arab Emirates (UAE) as part of its new agreement with the International Monetary Fund (IMF), an official from the IMF revealed. This funding goes beyond the $12 billion in loans that are being rolled over by the three nations.
Nathan Porter, the IMF’s Mission Chief for Pakistan, confirmed the financing assurances from the countries but did not disclose exact amounts. He emphasized that this financial backing would be in addition to the debt rollovers.
“I can’t go into the specific figures, but UAE, China, and Saudi Arabia have all pledged significant financial support in conjunction with this program,” Porter said during a media briefing.
On Wednesday, the IMF’s Executive Board approved a new 37-month loan package for Pakistan worth $7 billion, which is aimed at stabilizing the country’s economy through “sound policies and reforms.”
This approval triggers an immediate release of $1 billion for Pakistan, which has been part of 22 IMF bailout programs since 1958.
Porter highlighted Pakistan’s “remarkable” economic recovery since mid-2023, noting a substantial drop in inflation, stable exchange rates, and a significant rise in foreign reserves.
He attributed this improvement to sound economic policies, while emphasizing the importance of continuing to maintain stability and foster growth. The focus now, he said, is on sustaining progress through consistent fiscal, monetary, and exchange rate policies, improving public spending, and raising tax revenues.
He further pointed out that Pakistan achieved its first primary budget surplus in 20 years last year and the IMF program aims to increase this to 2% of the country’s GDP. One of the key areas of reform is improving tax collection from under-taxed sectors, such as retailers.
The next IMF loan review is expected to take place in March or April 2025, depending on Pakistan’s economic performance at the end of 2024, according to Porter.
In related news, IMF Managing Director Kristalina Georgieva described her recent meeting with Pakistan’s Prime Minister Shehbaz Sharif as “very productive.” She stated that their discussions focused on Pakistan’s ongoing recovery efforts, tax reforms, and strategies to boost job creation and inclusive growth.
