| Islamabad: Pakistan is set to receive significant budgetary support from the Asian Development Bank (ADB) over the next four years, following the International Monetary Fund’s (IMF) approval of a USD 7 billion loan program for the country. The ADB has committed approximately USD 2.75 billion in additional loans to Pakistan, including a provision for USD 800 million for fiscal year 2024-25, while an estimated USD 650 million will be disbursed annually for the subsequent three fiscal years.
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The ADB’s commitment reflects renewed confidence from international financial institutions in Pakistan’s economic recovery efforts. The IMF’s endorsement, which included a USD 1.03 billion initial tranche, has been pivotal in securing this additional assistance, as it underscored Pakistan’s commitment to reforms and macroeconomic stability.
In September, the ADB approved a separate USD 320 million loan for Pakistan aimed at improving road infrastructure in Khyber Pakhtunkhwa (KP), where rural connectivity will be strengthened through the development of approximately 900 kilometers of roads. This project, under the Khyber Pakhtunkhwa Rural Roads Development Project, seeks to improve all-weather connectivity in areas vulnerable to flooding and poor road conditions, aligning with broader infrastructure improvements.
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Prime Minister Shehbaz Sharif’s government has also secured commitments totaling USD 3.2 billion from other international creditors, including a USD 1.2 billion Saudi Oil Facility for the next 12 months, a USD 1 billion commercial loan from Dubai Islamic Bank, USD 600 million from Standard Chartered Bank, and USD 430 million from the Islamic Development Bank’s International Islamic Trade Finance Corporation.
Finance Minister Muhammad Aurangzeb has indicated that these developments represent steady progress toward economic stability, citing constructive talks with the IMF and World Bank. He also noted that Pakistan is working toward eliminating its non-filer category for tax purposes and raising the tax-to-GDP ratio, indicating broader reform efforts.
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These financial infusions come amid Pakistan’s ongoing challenges with debt repayment, foreign exchange reserves, and inflation, offering the country renewed fiscal support as it continues to implement reforms and develop critical infrastructure. |
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