Pakistan and the IMF have reached a new agreement securing a six billion US dollars bailout for the cash strapped country, following months of painstaking negotiations between the two sides.
The agreement was confirmed by the IMF which added that the funds would be disbursed over 39 months.
“Pakistan is facing a challenging economic environment, with lacklustre growth, elevated inflation, high indebtedness, and a weak external position,” said Ernesto Ramirez Rigo, the head of the IMF’s mission to Pakistan, said in the statement.
The overall fiscal deficit currently stands at roughly 1.9 percent of the GDP, according to central bank data.
The programme will include “tax policy revenue mobilisation measures to eliminate exemptions, curtail special treatments, and improve tax administration”.
It will also target Pakistan’s loss-making state-owned enterprises and the country’s energy sector, long plagued by structural issues that have led to a burden of heavy subsidies on the government.
The agreement will now be reviewed by the IMF’s management and board, and approval will be “subject to the timely implementation of prior actions and confirmation of international partners’ financial commitments”, the IMF said.
Via IMF, Al Jazeera
