ISLAMABAD: Pakistan has reached a staff-level agreement with the International Monetary Fund (IMF) for a new $7 billion loan program, the IMF said on Friday, the country’s latest move to turn to the global lender for assistance in keeping its fragile economy afloat.
Pakistan completed a short-term $3 billion IMF program in April this year, with the release of a final tranche of $1.1 billion. The facility helped Islamabad avert a default last year. Pakistan’s Finance Minister Muhammad Aurangzeb said his government planned to seek a longer-term loan from the IMF to help stabilize the $350 billion economy after the end of the last program.
The IMF said the new loan deal, which will span 37 months, was aimed at strengthening fiscal and monetary policy as well as reforms to broaden the tax base, improve management of state-owned enterprises, strengthen competition, secure investment, enhance human capital, and scale up social protection through increased generosity and coverage in major welfare programs.
“The program aims to capitalize on the hard-won macroeconomic stability achieved over the past year by furthering efforts to strengthen public finances, reduce inflation, rebuild external buffers and remove economic distortions to spur private sector-led growth,” IMF’s mission chief to Pakistan Nathan Porter said in a statement.
The deal, which is subject to approval by the IMF executive board, came after the government of Prime Minister Shehbaz Sharif presented its first budget in parliament last month, promising an increase of up to 25 percent in salaries of government employees and setting an ambitious tax collection target.
The finance minister said Pakistan wanted to collect Rs13 trillion ($44 billion) in taxes, which would be 40 percent more than the last fiscal year’s. He said the government would ensure an increase in the number of taxpayers the country from the existing 5 million people who paid taxes in Pakistan.
Analysts said the new budget of about $68 billion, up from $50 billion in the last year, was likely to land a longer-term IMF bailout of up to $8 billion to help stabilize the economy.
Pakistan reaches new $7 billion loan deal with IMF, says lender
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Pakistan reaches new $7 billion loan deal with IMF, says lender
- The new loan deal, which will last for 37 months, is aimed at strengthening fiscal and monetary policy as well as reforms
- The program aims to capitalize on the hard-won macroeconomic stability achieved over the past year, says IMF’s mission chief
Pakistan says PM Sharif has received invitation to join Gaza peace board
- Board is set to supervise temporary governance of Gaza
- Gaza has been under a shaky ceasefire since October
ISLAMABAD: Pakistan’s foreign ministry said on Sunday Prime Minister Shehbaz Sharif had received an invitation from US President Donald Trump to join the so-called “Board of Peace” for Gaza.
The White House on Friday announced some members of this board, which would outlive its role supervising the temporary governance of Gaza, under a fragile ceasefire since October.
The names include US Secretary of State Marco Rubio, President Donald Trump’s special envoy Steve Witkoff, former British prime minister Tony Blair and Trump’s son-in-law, Jared Kushner. Trump is the chair of the board, according to a plan the White House unveiled in October.
Israel and the Palestinian group Hamas signed off on Trump’s plan, which says a Palestinian technocratic administration will be overseen by an international board, which will supervise Gaza’s governance for a transitional period.
“The Prime Minister of Pakistan has received the invitation from the President of the United States to join the Board of Peace on Gaza,” the Foreign Office said in a statement.
“Pakistan will remain engaged with international efforts for peace and security in Gaza, leading to a lasting solution to the Palestine issue in accordance with United Nations resolutions.”
Many rights experts and advocates have said Trump overseeing a board to supervise a foreign territory’s governance resembles a colonial structure, while Blair’s involvement was criticized last year due to his role in the Iraq war and the history of British imperialism in the Middle East.
The White House did not detail the responsibilities of each member of the board. The names do not include any Palestinians. The White House said more members will be announced over the coming weeks.
It also named a separate, 11-member “Gaza Executive Board” to support the technocratic body, including Turkish Foreign Minister Hakan Fidan, UN Middle East peace coordinator Sigrid Kaag, United Arab Emirates International Cooperation Minister Reem Al-Hashimy, and Israeli-Cypriot billionaire Yakir Gabay.
But Israeli Prime Minister Benjamin Netanyahu’s office has said the composition of this board had not been coordinated with Israel and contradicted its policy — possibly a reference to Fidan’s presence, as Israel objects to Turkish involvement.
With inputs from Reuters
