The Immediate Financial Aid to Pakistan Announced by IMF

- Recently, the International Monetary Fund (IMF) approved the transference of the ultimate $1.1 billion portion of a $3 billion bailout to Pakistan. This bailout is a measure to support Pakistan amid its ongoing drastic economic crisis.

- This decision holds immense significance as Pakistan is currently confronting apprehensions concerning a potential default on forthcoming foreign debt payments.

- The IMF under the Stand-By Arrangement (SBA) of $3 billion pledged to distribute a financial aid of $700 million to Pakistan. This decision is aimed at bolstering the sinking economy of the country.

- The final decision concerning the release of funds will be made during an Executive Board meeting set to be held on January 11.

- As it stands, a significant portion of $1.8 billion of the SBA has yet to be disbursed.

- Initiated in 2019, this SBA is expected to reach its completion in April 2024.

IMF's Economic Projections for Pakistan

- IMF has anticipated Pakistan's economic future in its most recent projections. It foresees a contraction in real GDP by 0.5% by 2024.

- Further, the Consumer Price Index is projected to surge significantly, signalling a potential escalation in inflation.

Pakistan’s Endeavours and Achievements amid Economic Woes

- Despite grappling with high inflation, Pakistan has managed to surpass the revenue collection target as set by the IMF for the period of July-December.

- The receipt of the second tranche scheduled for January will further assist Pakistan in acquiring the residual amount in March.

Pakistan's Dependence on IMF: A Historical Overview

- Pakistan joined the IMF back in 1950 and has since been involved in 24 arrangements with the fund, chiefly due to its recurring balance-of-payments challenges.

- Both the ongoing SBA and the forthcoming bailout tranche are indicative of Pakistan's heavy reliance on the IMF.

A Brief Introduction to the International Monetary Fund (IMF)

- The IMF, an international body, was conceived at the Bretton Woods Conference in 1944 and established officially on 27th December 1945.

- It is headquartered in Washington, D.C., and as a specialised agency of the United Nations, the IMF aspires to encourage global monetary collaboration, secure financial stability, and promote international trade, employment, and economic growth globally.

- The operations of the IMF started with 29 member countries on 27th December 1945. Today, its membership extends to 189 countries worldwide.