Pakistan has been witnessing a severe economic crisis for past months now. There was a big dilemma about whether International Monetary Fund (IMF) will approve financial aid to this country or not. Now, in a relief to the cash-strapped country, IMF has sanctioned a 9-month Stand-By agreement for Pakistan to support the countrys stabilization programme on Wednesday.IMF approves finance aid to PakistanIn an official statement, the IMF said, “Today, the Executive Board of the International Monetary Fund (IMF) approved a 9-month Stand-By Arrangement (SBA) for Pakistan for an amount of SDR 2,250 million (about USD 3 billion, or 111 per cent of quota) to support the authorities economic stabilization programme.”The IMF Executive Board approved a $3 billion Stand-By Arrangement for Pakistan 🇵🇰 to help stabilize the economy and guard against shocks, while creating the space for social and development spending to help the Pakistani people: https://t.co/0h6JyNhASu pic.twitter.com/1XHItxwMhm— IMF Middle East & North Africa (@IMFinMENA) July 12, 2023In June, Pakistan and IMF reached a staff-level agreement (SLA) of $3 billion which resulted in the country. This latest announcement by IMF came after Pakistans Finance Minister, Ishaq Dar said the country has received $1 billion from the UAE as part of financial aid to help the crisis-hit country receive the IMD bailout package.Speaking in a televised address, the finance minister said, “We have received USD 1 billion from the UAE. The UAE has deposited the amount into the State Bank account.” Also, on Tuesday, Dar announced that Saudi Arabia deposited $2 billion in the State Bank of Pakistan account to help boost its foreign reserves.Pakistan-IMF dealsLast month, Pakistan also signed a short-term IMF deal under which Islamabad will receive USD 3 billion over nine months, subject to approval by the IMFs board, said the media reports. After months of delays, Pakistan secured the IMF bailout package after taking tough economic measures, including raising interest rates and increasing taxes to meet IMF conditions, the report added.Pakistan Prime Minister Shehbaz Sharif has called the approval of IMFs SBA a major step forward in the governments efforts to stabilise the countrys economy. The PM also stressed that IMFs decision bolsters Pakistans economic position to overcome economic challenges. He expressed gratitude to IMF Managing Director Kristalina Georgieva for their support.Pak PMs stance on IMF AidTaking it to Twitter, Shehbaz Sharif wrote, “The approval of Stand-by Agreement of $3 billion by the IMFs Executive Board a little while ago is a major step forward in the governments efforts to stabilise the economy and achieve macroeconomic stability. It bolsters Pakistans economic position to overcome immediate- to medium-term economic challenges, giving the next government the fiscal space to chart the way forward.”The approval of Stand-by Agreement of $3 billion by the IMFs Executive Board a little while ago is a major step forward in the governments efforts to stabilise the economy and achieve macroeconomic stability. It bolsters Pakistans economic position to overcome immediate- to…— Shehbaz Sharif (@CMShehbaz) July 12, 2023Meanwhile, Pakistans economic condition is constantly deteriorating. Overall Business Confidence Score (BCS) stood at negative 25 per cent during the survey conducted in March-April 2023 (Wave 23), which was 21 per cent lower than the previous level of negative 4 per cent seen during the last such survey conducted in September-October 2022 (Wave 22).A decline of 25 per cent in a matter of 6 months is indicative of the pace at which confidence in the Pakistani industry is waning. According to media reports, the three major threats to business growth identified in the survey were high Inflation (82 per cent of respondents), high taxation (74 per cent), and Pakistani rupee devaluation (72 per cent).
