IMF Approves $1.3 Billion Loan for Pakistan's Climate Resilience

The International Monetary Fund approved a $1.3 billion loan to Pakistan to combat climate change and reached an agreement on a $7 billion loan review. This new arrangement covers 28 months and aims to support climate resilience while promoting financial reforms. Total disbursements could reach $2 billion.

The International Monetary Fund has sanctioned a $1.3 billion loan to Pakistan, aimed at addressing climate change challenges while finalizing a $7 billion loan review. The announcement was made on Wednesday, as part of the IMF's effort to assist nations in tackling major climate-related hurdles while remaining committed to critical reforms.

The new agreement, under the Climate Resilience and Sustainability Facility, spans 28 months and is part of a broader initiative to promote economic stability. It frees up $1 billion for Pakistan under the existing $7 billion bailout program, potentially increasing total disbursements to $2 billion. This development signifies Pakistan's progress in areas such as tax policy, monetary stability, and energy sector transformation.

According to Nathan Porter, the IMF mission chief to Pakistan, the approved funding underscores the country's achievements in macroeconomic stability despite a challenging global environment. Although economic growth remains moderate, reductions in inflation, improved financial conditions, and stronger external balances highlight Pakistan's significant strides towards stability.

(With inputs from agencies.)