Cash-strapped Pakistan receives US$6 billion bailout package from IMF as China promises more help

The agreement, which came after months of painstaking negotiations between the two sides, marks Pakistan’s 22nd bailout with the IMF

It came as Pakistan received a US$2.2 billion loan from China on Monday, with a Chinese embassy official extending the offer of more help

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Pakistani Prime Minister Imran Khan. Photo: AP

Published: 5:22pm, 13 May 2019Updated: 6:38pm, 13 May 2019

Pakistan and the International Monetary Fund (IMF) have reached a new agreement securing a US$6 billion bailout package, in a move that came as China on Monday gave a US$2.2 billion loan to the cash-strapped nation.

The agreement came after months of painstaking negotiations between the two sides and marks Pakistan’s 22nd bailout with the IMF.

“The programme aims to support the authorities’ strategy for stronger and more balanced growth by reducing domestic and external imbalances, improving the business environment, strengthening institutions, increasing transparency, and protecting social spending,” said Ramirez Rigo, head of the IMF delegation, in a statement.

According to Pakistan’s finance adviser, the country is set to receive US$6 billion from the IMF in addition to US$2 to US$3 billion from the World Bank and Asian Development Bank over the next three years.

Pakistan has had 21 previous bailouts since it joined the IMF in 1950. Photo: Reuters

“We have a US$12 billion gap in our annual payments and we don’t have the capacity to pay them,” Abdul Hafeez Shaikh said in a televised address as he announced the new agreement with the fund.