Pakistan, ADB sign loan agreement worth $1.3bn
- By Web Desk -
- Dec 09, 2019
ISLAMABAD: Pakistan and the Asian Development Bank (ADB) on Monday signed a loan agreement of $1.3 billion in Islamabad, ARY News reported.
The loan amount approved by the ADB is to help strengthening Pakistan’s slowing economy. The agreement was finalised in the present of Federal Minister for Economic Affairs Hammad Azhar in the federal capital, today.
Economic Affairs Division and ADB have signed policy based loans of USD 1.3 Bn today. The sums will be disbursed today and will help bolster reserves and strengthen our economic outlook.
— Hammad Azhar (@Hammad_Azhar) December 9, 2019
According to the agreement, the fresh loan will focus strengthening country’s foreign reserves and improvement in the energy sector.
Pakistan is facing significant economic challenges on the back of a large balance of payments gap and critically low foreign exchange reserves together with weak and unbalanced growth.
Read more: ADB approves additional $200mn for social protection projects in Pakistan
While the country’s economy has a history of boom and busts economic cycles, it reached a tipping point in 2018 after foreign investment shrank sharply in an uncertain political and global economic environment and the ongoing poor performance of state-owned enterprises caused public debt to reach unsustainable levels.
In July, the IMF approved a three-year $6 billion Extended Fund Facility (EFF) to finance the government’s economic reform program that aims to put Pakistan’s economy on the path of sustainable and inclusive growth.