The IMF team is working “expeditiously” to respond to Pakistan’s request for financial assistance to fight the coronavirus.
IMF Managing Director Kristalina Georgieva on Pakistan says the proposal may be considered by the IMF Executive Board “as soon as possible”.
IMF didn’t mention the amount of this emergency loan, but two days ago Pakistan’s economic team told the media they are in talks with the monetary body for an emergency loan of $1.4b on soft terms.
Georgieva says this emergency financing will allow the government to address additional and urgent balance of payments needs and support policies.
This would make it possible to direct funds swiftly to Pakistan’s most affected sectors, including social protection, daily wage earners, and the healthcare system, the IMF representative said in a statement issued on Friday.
“In parallel, the authorities have reaffirmed their commitment to the reform policies included in the current arrangement under the Extended Fund Facility,” the statement read.
Other multilateral donors have also provided funds to fight the coronavirus pandemic and its economic implications. The World Bank has approved $1 billion and the Asian Development Bank has approved $1.5 billion. Pakistan will receive $300 million and $600 million immediately from WB and ADB respectively. The ADB will dispatch the remaining $900 million by June.
The funds Pakistan is receiving now are only for the purpose of fighting COVID-19 and providing relief to the people who are suffering because of it.
Next, Pakistan will also talk to these donors to provide budgetary support to deal with the economic implication of the coronavirus pandemic, which will hurt economic growth and lower the government’s tax collection.