Pakistan to get $6-billion bailout from International Monetary Fund to tackle economic crisis

Pakistan to get $6-billion bailout from International Monetary Fund to tackle economic crisis

The announcement was made by Abdul Hafeez Shaikh, prime minister's adviser on finance, on Sunday night. "This agreement is subject to IMF management approval and to approval by the Executive Board, subject to the timely implementation of prior actions and confirmation of global partners' financial commitments", said IMF's Ernesto Ramirez Rigo who has been in Islamabad for talks from April 29.

As part of the agreement, Pakistan is expected to receive $6 billion in assistance over the next three years.

The lender's executive board will meet to approve the agreement for the 39-month loan, "subject to the timely implementation of prior actions and confirmation of worldwide partners' financial commitments", IMF's mission chief Ernesto Ramirez Rigo said in a statement. "This includes improving public finances and reducing public debt through tax policy and administrative reforms to strengthen revenue mobilization and ensure a more equal and transparent distribution of the tax burden", the International Monetary Fund said.

Pakistan has availed 12 IMF stabilisation programmes and bailouts since 1988, totalling roughly $18.9bn in funds drawn, according to IMF data.

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Khan changed the entire economic team including the finance minister, chief of State Bank of Pakistan (SBP) and head of Federal Bureau of Revenue (FBR) under criticism for failure to improve the economy.

The budget for the coming 2019/20 fiscal year, expected later this month, will aim for a primary deficit, not including debt servicing costs, of 0.6 percent of gross domestic product. A market-determined exchange rate will help the functioning of the financial sector and contribute to a better resource allocation in the economy. "Priority areas include improving the management of public enterprises, strengthening institutions and governance, continuing anti-money laundering and combating the financing of terrorism efforts, creating a more favourable business environment, and facilitating trade", he said. The talks were extended to continue over the weekend and were capped on Sunday.

The agreement comes after months of negotiations and marks the latest in a string of bailouts from the fund.

The United Arab Emirates - Pakistan's largest trading partner in the Middle East and a major investment source - recently offered Us$3 billion to support the battered economy.

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