IMF approves much-awaited $3 billion bailout for Pakistan, saving it from defaulting on debt

The International Monetary Fund authorized a much-anticipated $3 billion bailout for Pakistan on Wednesday, according to the global lender, a decision that is expected to keep the country from defaulting on its debt commitments.

An agreement to distribute the money over a nine-month period in order to help Pakistan’s economic stabilization program was accepted by the executive board.

The announcement comes less than two weeks after Pakistan and the IMF agreed to the plan following meetings with Prime Minister Shehbaz Sharif, Finance Minister Ishaq Dar and other officials.

Kristalina Georgieva said in a press release that “Pakistan’s economy was hit hard by significant shocks last year, notably the spillovers from the severe impacts of floods, the large volatility in commodity prices, and the tightening of external and domestic financing conditions.

If Pakistan follows through on the $3 billion bailout, she added, it will allow the country to restore macroeconomic stability and correct imbalances by enacting policies consistently.

Sharif praised the IMF’s decision right away, claiming it was a significant advancement for the government’s attempts to stabilize the economy.