Why Pakistan badly needed the deal with the IMF

economictimes.indiatimes.com:

Pakistan on a bigger-than-expected $3 billion Stand-By Arrangement (SBA), a last-minute rescue package for the country facing an acute balance-of-payments crisis. Islamabad was racing against time to unlock $1.1 billion under the IMF's ninth review of a $6.5-billion Extended Fund Facility agreed upon in 2019.

The programme was due to expire on June 30. Here are some facts about the importance of unlocking the funds for the cash-strapped South Asian country of 230 million people and the challenges it has faced:WHAT IS PAKISTAN GETTING The nine-month SBA will release nearly $3 billion, or 111% of Pakistan's IMF quota, the lender said.

The agreement is subject to approval by the IMF's Executive Board, which is expected to consider the request by mid-July, it said. Such approvals are generally granted once a staff-level deal is done.

The Pakistan government was expecting around $2.5 billion from the IMF, Reuters has reported.PROCESSESPakistan earlier cleared eight of the 11 listed programme reviews, with the ninth review pending since November last year. The delay was already the longest since at least 2008.

The ninth review had been stalled due to differences between the fund and Islamabad over policy actions, including external financing needs and a budget that meets programme goals.TOUGH CONDITIONSThe initial draft of the 2023-2024 budget presented in parliament earlier this month failed to meet IMF expectations but was hurriedly revised to introduce new taxes and expenditure cuts. The country's central bank also hiked the key rate by 100 basis points in an emergency meeting on Monday, barely two weeks after keeping the rate unchanged in a scheduled meeting.HOLE IN FINANCESThe government has earmarked $2.5 billion in