IMF board likely to approve $7b bailout for Pakistan in August

ISLAMABAD: The International Monetary Fund (IMF) Executive Board likely to approve a $7 billion bailout package for Pakistan in August, ARY News reported citing sources.

According to sources, the International Monetary Fund (IMF) Executive Board meeting is expected to take place in August.

Pakistan and the IMF had reached a staff-level agreement on July 12. The IMF Board is expected to give final approval to the agreement within 4-6 weeks.

Finance Ministry sources said that before the board meeting, Pakistan will ensure external financing. The current loan program does not include funding for climate change. However, funding for climate change and natural disaster risks is expected in November, sources said.

The IMF will consider Pakistan’s proposed request for climate financing. After the first review meeting, there may be discussions on climate change programs.

Sources said that Pakistan will have to identify long-term priority projects related to climate change. The IMF’s Resilience and Sustainability Facility (RSF) program provides cheap and long-term financing.

To achieve this goal, Pakistan will have to work with other global institutions, sources from the Ministry of Finance said. Bangladesh has already received a $1.5 billion IMF program for climate change.

It is pertinent to mention here that on July 13 Pakistan and the International Monetary Fund reached a three-year, $7 billion aid package deal.

The new programme, which needs to be validated by the Fund’s Executive Board, should enable Pakistan to “cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth,” according to a statement.

READ: Pakistan secures $7bn aid deal with IMF

The agreement is subject to approval by the IMF’s executive board.

“The programme aims to capitalise on the hard-won macroeconomic stability achieved over the past year by furthering efforts to strengthen public finances, reduce inflation, rebuild external buffers and remove economic distortions to spur private sector-led growth,” the IMF statement said, quoting Nathan Porter, the Fund’s mission chief to Pakistan.