Islamabad: Pakistan, burdened by debt, is set to become the fourth-largest borrower from the International Monetary Fund (IMF) globally. The country is expected to receive a fresh loan of USD 3 billion within the next nine months as part of a standby arrangement reached with the international lender.
The economic crisis in Pakistan, considered the worst since gaining independence from Britain in 1947, led the country to be ranked fifth among countries with the highest borrowing from the IMF as of March 31, 2023, as per data from The Express Tribune newspaper.
However, the recent Stand-By Arrangement made with the IMF on Thursday will propel Pakistan to the fourth spot on the list when the additional USD 3 billion loan is disbursed. This will bring the total loans from the IMF to USD 10.4 billion, surpassing Ecuador and establishing Pakistan as the world’s fourth-largest borrower from the IMF.
The country’s financial challenges are exacerbated by a severe balance of payments crisis resulting from both the spillovers of the conflict in Ukraine and domestic issues. Pakistan also holds the “title” of being the largest IMF borrower in the Asian region, according to the report. Other Asian countries that borrowed from the IMF, including Sri Lanka, Nepal, Uzbekistan, the Kyrgyz Republic, Armenia (West Asia), and Mongolia, are far behind Pakistan in terms of taking loans from the global lender. In August 2022, the IMF extended USD 1.1 billion to Pakistan as part of a USD 6.5 billion programme agreed back in July 2019.
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