IMF approves immediate release of final $1.1 bn instalment of $3bn bailout to Pakistan

KABUL, AFGHANISTAN: The International Monetary Fund on Monday approved the immediate release of the final $1.1 billion instalment of a $3 billion bailout to Pakistan, according to a statement from the global lender.

Pakistan requires this money to overcome one of the most severe economic crises in its history, which had raised concerns about its potential default on the payment of foreign debts.

As part of the bailout conditions, the government was obliged to reduce subsidies intended to mitigate the impact of rising living costs. This led to an increase in prices, particularly energy bills, which provoked public anger. Islamabad also imposed new taxes, another move that was unpopular.

However, an IMF official stated that the country's "determined policy efforts" have resulted in progress in restoring economic stability.

Moderate growth has resumed, external pressures have eased, and while still high, inflation has started to decline, said Antoinette Sayeh, the IMF's Deputy Managing Director and Chair, in the statement.

"Given the significant challenges ahead, Pakistan should capitalise on this hard-won stability by persevering — beyond the current arrangement — with sound macroeconomic policies and structural reforms to create stronger, inclusive and sustainable growth," Sayeh added.

Last month, Finance Minister Muhammad Aurangzeb stated that Pakistan planned to seek a long-term loan to help stabilise the economy after the end of the current bailout package.

He didn't provide a figure, but officials have previously indicated that they want an additional $8 billion from the IMF over three years.

By RSS/AP