Pakistan To Become 4th Largest Debtor To IMF, Set To Receive $3 Billion Loan Package For Economic Recovery

Pakistan is set to receive a fresh loan of $3 billion from the International Monetary Fund (IMF) in the next nine months, as part of a standby arrangement with, according to reports in The Express Tribune.

Notably, this is intended to provide financial support to the country which is on the brink of economic collapse.

Currently, the country ranks fifth in terms of receiving loans from the IMF. With the upcoming $3 billion loan, Pakistan will move up to the fourth position on the list.

The deal, although still pending approval from the IMF's board, is a significant development for Pakistan. Reportedly, it comes after a delay of over eight months.

In terms of loans from the IMF, Argentina was ranked first with $46 billion, followed by Egypt in second place with $18 billion, Ukraine in third with $12.2 billion, Ecuador in fourth with $8.2 billion, and Pakistan in fifth position with $7.4 billion.

Pakistan is now, thus, set to become the world's fourth-largest borrower from the IMF, surpassing Ecuador, with loans worth $10.4 billion.

Despite the IMF having a total of 93 countries owing it money, the top 10 debtors, including Pakistan, account for a significant 71.7% of the total outstanding balance of $155 billion.

According to a report, Pakistan holds the distinction of being the largest borrower from the IMF in the Asian region. Other Asian countries, such as Sri Lanka, Nepal, Uzbekistan, the Kyrgyz Republic, Armenia, and Mongolia, have borrowed from the IMF but have taken fewer loans compared to Pakistan.

Earlier in August 2022, Pakistan received $1.1 billion from the IMF as part of a $6.5 billion program agreed upon in July 2019. According to reports, only 19 member countries of the IMF have a debt of $1 billion or more.

Pakistan's economy has been in a downward spiral for many years, causing immense hardship for the impoverished population. Uncontrolled inflation has made it nearly impossible for a significant number of people to make ends meet.

Further, in recent times, Pakistan has faced numerous challenges. Devastating floods last year and the resulting increase in commodity prices due to the war in Ukraine have further exacerbated the situation.

This comes even as concerns abound regarding Pakistan's deployment of resources for state-sponsored terrorism, often targeted at India, in spite of its crumbling economic situation.