IMF bails out Pakistan, to pay $6 bn over next 3 yrs


Islamabad, May 13
Pakistan and the IMF have reached a new agreement securing a $6 billion bailout for the cash-strapped country, officials said on Sunday, following months of painstaking negotiations between the two sides.
The agreement marks Pakistan's 22nd bailout with the Fund, as the country struggles to stave off a looming balance-of-payments crisis while its economy teeters due to low growth, soaring inflation, and mounting debt.
"The programme aims to support the authorities' strategy for stronger and more balanced growth by reducing domestic and external imbalances, improving the business environment, strengthening institutions, increasing transparency, and protecting social spending," said Ramirez Rigo, head of the IMF delegation, in a statement on Sunday.
According to Pakistan's finance advisor Abdul Hafeez Sheikh the country is set to receive $6 billion from the IMF in addition to $2 to $3 billion from the World Bank and Asian Development Bank over the next three years.
"We have a $12 billion gap in our annual payments and we don't have the capacity to pay them," Sheik said in a televised address as he announced the new agreement with the fund.
Analysts have warned that any fresh IMF deal would likely come with myriad restrictions that could hobble Prime Minister Imran Khan's grand promises to build an Islamic welfare state, as the country is forced to tighten its purse strings.
The deal with the IMF comes weeks after Sheikh -- a former World Bank official who was Pakistan's finance minister from 2010-2013 -- was appointed as "adviser on finance" after Finance Minister Asad Umar resigned amid a wide-ranging cabin reshuffle.
The abrupt resignation of Umar -- one of Khan's most powerful ministers -- was particularly shocking due to his perceived role in overseeing the vital negotiations with the IMF over the long-delayed bailout. AFP