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

abcnews.go.com:

The International Monetary Fund has approved a much-awaited $3 billion bailout for Pakistan that likely will save the nation from defaulting on its debt repayments

ISLAMABAD — The International Monetary Fund approved a much-awaited $3 billion bailout for Pakistan on Wednesday, the global lender said, a move that's likely to save the nation from defaulting on its debt repayments.

The IMF said its executive board approved an agreement to release the funds over nine months to support Pakistan's economic stabilization program.

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.

«The arrangement comes at a challenging economic juncture for Pakistan. A difficult external environment, devastating floods, and policy missteps have led to large fiscal and external deficits, rising inflation, and eroded reserve buffers» in the fiscal year 2023, the IMF said in a statement.

Later, IMF head Kristalina Georgieva said in a statement 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."

She said the $3-billion bailout, if “implemented faithfully” by Pakistan, will give it an opportunity to regain macroeconomic stability and address imbalances through consistent policy implementation.

Sharif quickly welcomed the IMF decision, saying it was a major step forward in the government’s efforts to stabilize the economy.

“It bolsters Pakistan’s economic position to overcome immediate to medium-term economic challenges, giving