Pakistan's PM Sharif hails IMF's $7B loan approval

Pakistani Prime Minister Shehbaz Sharif leaves United Nations headquarters during the U.N. General Assembly in New York, Sept. 24, 2024.

Pakistan reported Wednesday that the International Monetary Fund, or IMF, had approved a crucial $7 billion loan for the cash-strapped nation struggling to meet its external financing needs. In a statement issued by his office, Pakistani Prime Minister Shehbaz Sharif "expressed satisfaction" and hailed the IMF's approval of the much-needed loan. He also thanked Kristalina Georgieva, the IMF chief, and his own economic team for successfully negotiating the agreement, the statement said. The Washington-based global lender was expected to release a separate statement. Pakistani media reports said the IMF had agreed to the 37-month loan agreement for the South Asian nation under the Extended Fund Facility and authorized the immediate release of the first tranche of nearly $1.1 billion. Sharif, who is in New York for the U.N. General Assembly session, told Pakistani media representatives before Wednesday's approval that his government had met all of the lender's conditions. He stated that the lender had "set stringent conditions" for the loan program preliminarily agreed to in July. The prime minister credited Pakistan's longtime allies, China, Saudi Arabia and the United Arab Emirates, with helping Islamabad finalize the IMF deal, but he did not elaborate. Pakistan was required to seek an extension on existing $5 billion, $4 billion and $3 billion cash loan agreements from Riyadh, Beijing and Abu Dhabi to fulfill a critical IMF condition. Islamabad reportedly has committed not to repay more than $12 billion in debt to three allied nations and Kuwait during the 37-month IMF program period. The new $7 billion loan is Pakistan's 25th IMF program since it gained independence in 1947 — the highest number acquired by any country. "We are committed to ensuring this is the last time we seek such financial support from the IMF," Sharif reiterated while speaking to Pakistani media in New York. However, critics remain skeptical about his assertions. Experts blame chronic economic mismanagement, corruption, repeated dictatorial military regimes, and the failure of successive elected governments to introduce much-needed reforms for the financial troubles facing Pakistan, a nuclear-armed country of more than 240 million people. Islamabad has managed its external funding needs in the past with loans, economic support from its long-standing allies and IMF financial assistance.