Pakistan Faces 'Transitional Pain' with New $7 Billion IMF Loan, Finance Minister Warns

Pakistan's Finance Minister, Muhammad Aurangzeb, forewarned 'transitional pain' as the nation embarks on its 25th IMF program, a $7 billion loan, aiming to be the last. The deal, conditional upon structural reforms, aims to stabilize Pakistan's economy and ensure stronger, inclusive growth.

Pakistan's Finance Minister Muhammad Aurangzeb has cautioned that the country will experience 'transitional pain' following an agreement with the International Monetary Fund (IMF) for a $7 billion loan. Aurangzeb emphasized the necessity for structural reforms, marking this as potentially Pakistan's last IMF program.

This deal is the 25th IMF program undertaken by Pakistan since it gained independence in 1947 and aims to implement sound policies to strengthen the economy and foster inclusive growth. Prime Minister Shehbaz Sharif's administration agreed in July to this significant aid that requires implementing unpopular reforms, including expanding the tax base.

Political instability and economic challenges have plagued Pakistan, nearly leading it to default last year. With the new loan proceeds and required reforms, the government aims to stabilize the country's finances, combat inflation, and address the structural issues that have hindered investment and economic growth. In a recent meeting in New York, Sharif expressed gratitude to IMF chief Kristalina Georgieva and the support extended by Saudi Arabia, China, and the UAE.

(With inputs from agencies.)