Pakistan gets a lifeline from the IMF with a new $3 billion bailout to help avoid default

economictimes.indiatimes.com:

Pakistan in badly needed relief to help bail out the impoverished country's ailing economy. The nine-month agreement must be approved by the IMF's Executive Board, which is expected to make a final decision in mid-July, a top IMF official, Nathan Porter, said in a statement late Thursday.

The announcement followed talks earlier this week between Pakistani Prime Minister Shahbaz Sharif and Kristalina Georgieva, the managing director of the IMF, who both suggested that the sides were close to reaching an agreement. Porter, the IMF's mission chief to Islamabad, said Pakistan's economy has faced several heavy blows recently, such as the devastating floods last summer that killed 1,739 people, caused $30 billion in damage and impacted millions of Pakistanis.

The country was also hit by an international commodity price spike in the wake of Russia's war in Ukraine. Porter said despite the authorities' efforts to reduce imports and the trade deficit, reserves have declined to very low levels and liquidity conditions in the power sector also remain acute.

«Given these challenges, the new arrangement would provide a policy anchor and a framework for financial support from multilateral and bilateral partners in the period ahead,» an IMF statement read. Porter said over the past few days, the Pakistani authorities had «taken decisive measures to bring policies more in line with the economic reform program supported by the International Monetary Fund,» including Parliament passing a revised budget.

The proposed package is higher than what Pakistan was expecting as it awaited the release of a remaining tranche from a 2019 bailout of $6 billion that expired on Friday. That deal was signed by Sharif's predecessor, former Prime Minister