The nine-month deal must be approved by the IMF’s Executive Board, which is expected to make a final decision in mid-July, Nathan Porter, a senior official at the global financial institution, said in a statement late Thursday.
Porter, head of the IMF mission in Islamabad, noted that the Pakistani economy has faced several external problems, such as last year’s catastrophic floods that killed 1,739, caused $30 billion in damage and affected millions of Pakistanis. The country has also been hit by a global spike in commodity prices following Russia’s invasion of Ukraine.
Despite the authorities’ efforts to reduce imports and the trade deficit, foreign exchange reserves have reached very low limits and liquidity conditions in the electricity sector remain poor, the IMF official said.
“In the face of these challenges, the new agreement would offer political support and a framework for financial support from multilateral and bilateral partners in the coming period,” the statement said.
The proposed package is bigger than what Islamabad expected. The country was awaiting the disbursement of the remaining 2.5 billion dollars of a 6.5 billion dollar rescue package closed in 2019 that expires on Friday.
