Pak gets 25th IMF bailout despite breach of loan terms
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New Delhi: Pakistan has become chronically dependent on bailouts from the International Monetary Fund (IMF) as it has been plunging from one fiscal crisis into another over the years. It is, however, ironic that the country been getting these loans despite Islamabad’s failure to meet the IMF conditions to revive the economy.
Pakistan is now headed for its 25th IMF loan with the latest $7 billion Extended Fund Facility (EFF), stretched over 37 months, and the accompanying $1.4 billion Resilience and Sustainability Fund (RSF). Under the Staff-Level Agreement reached in October, Pakistan will receive $1 billion under the EFF and $200 million under the RSF, bringing total disbursements under the two arrangements to about $3.3 billion.
"While this inflow offers temporary relief to a shaky market, it underscores the chronic dependence on external bailouts. Each programme is designed to stabilise the economy through macroeconomic discipline, yet Pakistan continues to fall short of the structural reforms necessary to create long-term resilience," according to an article in the Asian Lite newspaper.
The IMF’s role is not to micromanage domestic policy but to set fiscal targets, reduce deficits, increase revenue, and rationalise subsidies.
