The International Monetary Fund (IMF) has approved a $7 billion (£5.25 billion) loan to support cash-strapped Pakistan.
The country is set to receive the first $1 billion of this loan immediately, with the remaining funds disbursed over the next three years.
Prime Minister Shehbaz Sharif expressed his gratitude for the decision and thanked IMF Managing Director Kristalina Georgieva and her team.
Since 1958, Pakistan has taken out more than 20 loans from the IMF and is currently its fifth-largest debtor.
The IMF stated that the new program “will require sound policies and reforms” to stabilize the economy and enhance its resilience.
The South Asian nation has pledged that this will be its final loan from the international lender.
As part of the agreement, Islamabad has committed to implementing several unpopular measures, including increasing tax collection from individuals and businesses.
Pakistan has relied on IMF loans for decades to meet its financial needs and has faced ongoing challenges due to years of financial mismanagement.
Last year, the country was on the verge of defaulting on its debts and had barely enough foreign currency to cover a month’s worth of imports.
In July 2023, the IMF approved a $3 billion bailout for Pakistan, which also received support from allies such as Saudi Arabia and the United Arab Emirates (UAE).
At that time, Sharif stated that the bailout marked a significant step forward in efforts to stabilize the economy.
“It bolsters Pakistan’s economic position to overcome immediate to medium-term economic challenges,” he said.