But experts say that this approval is not a long-time solution for the country where its 230 million nations are facing an acute balance of payments crisis.<\/p>\n
The bailout had been frozen since December and the IMF refused to release $1.1 billion of the loan and blamed Pakistani authorities for not complying with the 2019 agreement signed between the IMF and the then Prime Minister Imran Khan.<\/p>\n
The hold on the funds was a big headache for the incumbent government and had created fears that the country would default, giving no hope for the country\u2019s economy.<\/p>\n
After months of discussion and struggle, finally the ballot has been approved, a Pakistani expert said, but is skeptical the money could solve the longer solution of an economy-starved nation.<\/p>\n
In long-term the agreement would fuel further economic crises <\/strong><\/p>\n \u201cFor the time being it may be a relief but in the long-term it would fuel further economic crises in Pakistan,\u201d Shamim Shahid, a Pakistan political expert told Harici.<\/p>\n Inflation in Pakistan touches all time high.<\/p><\/div>\n He furthered that \u201cPakistan\u2019s Non Development and Defense\u201d expenditures are badly affecting its budgetary allocations, developmental and economic sectors.<\/p>\n \u201cPakistan, if it really wants to end its economic and financial crises, must slash its non development and defense expenditures. With slashing defense expenditures almost all economic crises could be combated and IMF debts may be reimbursed,\u201d Shahid added.<\/p>\n Analysts say that Pakistan needs at least $20 billion in the next two years to pay its foreign loans. The money is included with interest. Meanwhile, the currency value of Pakistan against dollars has dropped significantly.<\/p>\n The currency and inflation is almost out of control, and now all eyes are on the new agreement to at least stabilize the currency and inflation.<\/p>\n Remaining $1.8 billion will be released in two installments<\/strong><\/p>\n An Islamabad-based writer and expert, Naveed Aman Khan told Harici that at the stage when Pakistan was at the verge of economic collapse the IMF had released $1.2 billion and it is a good sign.<\/p>\n \u201cRemaining $1.8 billion will be released in two installments. By this year Pakistan will have to bear $ 136 billion burden on its shoulders. Last year external loans were $123.57 billion which may reach $152.136 billion by 2027-28,\u201d Khan added.<\/p>\n Khan furthered that foreign reserves are still far beneath country’s level. \u201cChina, Saudi Arabia and UAE have extended their cooperation to avoid economic collapse,\u201d he added, calling it a great achievement for the government.<\/p>\n The positive thing is that Pakistan has gone through a number of reforms to meet the demand of the IMF since its mission arrived in the country in February. These changes include revising its 2023-24 budgets. The IMF also demanded the central bank of Pakistan to remain proactive to reduce inflation.<\/p>\n At the same time, reforms in the energy sector which has accumulated $12.58 billion in debt have been a key agenda of the talks between IMF and the Pakistani authorities.<\/p>\n Pakistan\u2019s PM reaction to the agreement<\/strong><\/p>\n Prime Minister Shehbaz Sharif has welcomed the IMF agreement and said it will help the country improve its economy.<\/p>\n \u201cThe approval of the Stand-by Agreement of $3 billion by the IMF’s Executive Board is a major step forward in the government’s efforts to stabilize the economy and achieve macroeconomic stability,\u201d Shehbaz added.<\/p>\n Pakistan primer furthered: \u201cIt (agreement) bolsters Pakistan’s economic position to overcome immediate- to medium-term economic challenges, giving the next government the fiscal space to chart the way forward. This milestone, which was achieved against the heaviest of odds and against a seemingly impossible deadline, could not have been possible without excellent team effort,\u201d he added.<\/p>\n Analysts say that the approval of the IMF bailout will also encourage other countries and international financial institutions to help start funding Islamabad to overcome economic challenges.<\/p>\n","protected":false},"excerpt":{"rendered":" Pakistan has finally secured the approval of $3 billion from the International Monetary Fund (IMF), unlocking the long-awaited lending that could help stabilize the delicate economy of the country, thought in a temporary period. The approval could help ease the nation\u2019s dire need for cash and somehow give a new start for the country to […]<\/p>\n","protected":false},"author":1,"featured_media":2833,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[4],"tags":[1457,52,63,845,1204,503,917,1458,1456],"class_list":["post-2831","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia","tag-central-bank","tag-economy","tag-finance","tag-fragile-economy","tag-fund","tag-headline","tag-inflation","tag-loan","tag-market"],"yoast_head":"\n![\"\"](\"https:\/\/harici.com.tr\/en\/wp-content\/uploads\/2023\/07\/inflation.jpg\")