• Tuesday, June 18, 2024

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Pakistan set to become fourth biggest IMF debtor

Its total borrowing from the lender will reach $10.4 billion when it receives $3 billion

IMF Mission chief Nathan Porter and his colleagues expressed their displeasure that the finance ministry had announced its verdict before the completion of the review process. (iStock image)

By: Chandrashekar Bhat

PAKISTAN will become the fourth largest IMF borrower in the world when it receives a fresh loan of $3 billion in the next nine months under an arrangement with the lender.

On March 31, 2023, the country was the fourth largest borrower from the International Monetary Fund (IMF), The Express Tribune newspaper reported.

It will move one notch up when it receives the $3 bn under a stand-by arrangement it reached with the Washington-based global lender on Thursday (29).

The deal, which needs to be approved by the IMF’S board, comes after an eight-month delay.

In terms of loans from the IMF, Argentina ranked first with $46 bn, followed by Egypt ($18 bn), Ukraine ($12.2 bn) and Ecuador ($8.2 bn) and Pakistan ($7.4 bn).

With loans from the global lender worth $10.4 bn, Pakistan will overtake Ecuador to become the world’s fourth-largest IMF borrower.

Cash-strapped Pakistan faces an acute balance of payments crisis because of the spillovers from the war in Ukraine and domestic challenges.

Despite 93 countries owing it money, the IMF’s top 10 debtors, including Pakistan, still account for the lion’s share of 71.7 per cent of the outstanding balance of $155 bn.

Pakistan is also the largest IMF borrower in Asia, according to the report.

Other Asian countries that borrowed from the IMF include Sri Lanka, Nepal, Uzbekistan, the Kyrgyz Republic, Armenia (West Asia) and Mongolia.

In August 2022, the IMF lent $1.1 bn to Pakistan as part of a $6.5 billion programme agreed back in July 2019.

Only 19 of the IMF’s member countries have a $1 bn or more debt, the report said.

Pakistan’s economy has been in a free fall mode for many years, bringing pressure on its people in the form of high inflation.

It has faced several challenges in recent times, including devastating floods last year and high commodity prices.

More than 1,500 people were killed last year during floods in Pakistan that destroyed millions of homes, wiped out swathes of farmland, and caused billions of dollars in economic losses.

(With input from PTI)

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