IMF approves $1 billion loan to Pakistan
IMF Approves $1 Billion Loan to Pakistan Amid Escalating Tensions with india
The International Monetary Fund (IMF) has agreed to disburse a $1 billion loan to Pakistan, which could help improve the country’s financial situation amid escalating tensions with its neighbor, India.
According to a report by the National on Saturday, cited by Tasnim News Agency, the Washington-based IMF announced in a statement on Friday that this loan also paves the way for an additional $1.4 billion under its sustainability program aimed at strengthening Pakistan’s economic resilience against climate vulnerabilities and natural disasters—though this amount has not yet been disbursed.
The IMF noted in its statement that Islamabad has effectively implemented the conditions tied to the $7 billion financial assistance package, approved in 2024, leading to improved fiscal stability and sustained economic recovery.
Economic Growth Projections
IMF estimates indicate that Pakistan’s real GDP grew by approximately 2.5% in 2024, with projections of 2.6% growth this year and 3.6% in 2026.
Nigel Clarke, IMF Deputy Managing Director, stated: “Despite challenging conditions, Pakistan has made meaningful progress in restoring macroeconomic stability… The economy continues to recover; inflation has sharply declined, and foreign reserves have notably strengthened.”
Rising Regional Tensions
The statement did not address the escalating conflict between nuclear-armed neighbors pakistan and India.On Saturday,both countries exchanged missile fire—a flare-up triggered by an april 22 terrorist attack in Kashmir’s pahalgam tourist area that killed 26 people.
Policy Priorities
The IMF emphasized future priorities: advancing reforms to boost competitiveness, increasing productivity, restructuring state-owned enterprises, improving public service delivery, ensuring energy sector sustainability, and enhancing climate resilience.
Economic Challenges & Recovery Signs
Over the past decade,heavy debt burdens (high inflation,rising energy costs),youth unemployment (climate vulnerabilities) have severely strained Pakistan’s economy—yet signs of recovery emerged last year: Inflation dropped steadily from nearly 40% in May 2023 to just 0.28% last month,its lowest since records began (2017).
