The aid is intended to support immediate efforts to stabilize the economy and protect it from shocks, while creating room for social and development spending to help the people of Pakistan, the IMF board said.
The country is suffering from the consequences of the pandemic, political instability and last year’s massive floods that flooded no less than a third of the country. As a result, economic growth has slowed, inflation has risen sharply and foreign exchange reserves have fallen, raising the risk that Pakistan will no longer be able to meet its international obligations.
The support from the International Monetary Fund is spread over nine months and is subject to a number of conditions. For example, the country had to promise to improve the tax collection system and tighten monetary policy.