Pakistan, which announced the International Monetary Fund’s approval of a new relief package worth US$ 7 billion to bolster its faltering economy on Thursday ( Sep 26 ), said it would have to go through” transitional pain.”
Although the South Eastern country’s economy has stabilized since it almost broke down last summer, it relys on loans from friendly nations and IMF bailouts to pay off its enormous bill, which accounts for half of its annual revenues.
There will be transitory pain, but if we want to make it the final program, structural reforms must be implemented, according to Finance Minister Muhammad Aurangzeb, according to the regional broadcaster Geo News.
The three-year mortgage programme” will need good policies and reforms” to help Pakistan’s continued efforts to strengthen its economy” and produce conditions for a stronger, more equitable, and tenacious growth”, the IMF said in an earlier statement.
In exchange for unpopular reforms like cutting back on energy subsidies and expanding its chronically low revenue base, Pakistan inked the agreement, which was its 24th IMF payment since 1958.
Prime Minister Shehbaz Sharif stated on the outside of the UN General Assembly in New York on Wednesday that the offer was successful because of the “absolute help” of Saudi Arabia, China, and the UAE.
” In the final phase ( of negotiations ), the IMF’s conditions were related to China. I am certainly appreciative of the support and strength the Chinese government gave us during this time, he said to reporters immediately before the deal was made public.
Aurangzeb stated last month that Pakistan was negotiating a US$ 12 billion loan refinancing with diplomatic loans.
The number comprised US$ 5 billion from Saudi Arabia, US$ 4 billion from China and US$ 3 billion from the UAE for a three- to five-year time.
Reacting to the media, Pakistan’s stock exchange opened on a positive note, reaching a new record high of 82, 905.