IMF approves $6.6 billion for Pakistan in 3 year arrangement

The IMF has approved giving $6.64 billion to Pakistan over three years to support the country's economic reforms and growth, saying it has "abundant potential" despite the challenges it faces, according to a media report today.

The approval enables an initial disbursement of about $544.5 million while the remaining amount will be evenly disbursed over the duration of the programme, subject to the completion of quarterly reviews.

The country was in intensive discussion with the multilateral funding institution to get a package for extended period of time.

The arrangement under the Extended Fund Facility equals 425% of Pakistan's quota and aims "to support the country's economic reform programme to promote inclusive growth", the Dawn reported, citing an IMF statement.

"Despite the challenges it faces, Pakistan is a country with abundant potential, given its geographical location and its rich human and natural resources," the International Monetary Fund executive board noted while giving its approval to the three-year arrangement yesterday.

The board also endorsed the government's economic reforms programme, hoping that it "help the economy rebound, forestall a balance of payments crisis and rebuild reserves".

The reforms package would also "reduce the fiscal deficit, and undertake comprehensive structural reforms to boost investment and growth", it added.

The IMF executive board reminded the government that adherence to the programme would catalyse the mobilisation of resources from other donors.

Nemat Shafik, IMF's deputy managing director and acting chair, however, noted that Pakistan still faced "serious economic challenges (as) overall vulnerabilities and crisis risks (remain) high, with subpar growth and unsustainable fiscal and balance of payments positions".