ISLAMABAD – The International Monetary Fund (IMF) has approved a $1.386 billion loan to Pakistan to strengthen the economy during the COVID-19 pandemic.
The loan is to meet the urgent balance of payment needs that have arisen due to the pandemic An IMF press release noted that the country’s health spending and social welfare support have increased during this time.
“The outbreak of COVID-19 is having a significant impact on the Pakistani economy. The domestic containment measures, coupled with the global downturn, are severely affecting growth and straining external financing. This has created an urgent balance of payments need,” said Executive Board First Deputy Managing Director and Acting Chair Geoffrey Okamoto.
The press release noted that the IMF emergency financing provides strong support to the Pakistani authorities’ emergency policy response, “preserving fiscal space for essential health spending, shoring up confidence and catalysing additional donor support”.
Loans given under the IMF’s rapid financing instrument, as this one has been, have to be repaid in 3.25 to 5 years.
Pakistan has recorded just over 100 deaths but experts have voiced fear that the country of 215 million people could see a rapid and devastating increase due to its shortage of medical infrastructure and crowded cities.-Agencies
