The International Monetary Fund has announced that it reached a staff-level agreement with the government of Pakistan on a loan of about seven billion dollars.
Pakistan has suffered economic difficulties following major flooding in 2022, with its currency values plunging and inflation surging.
Experts say the country’s debt-to-GDP ratio is above 70 percent.
The IMF says in a statement on Friday that the latest 37-month Extended Fund Facility Arrangement is to support efforts to “cement macroeconomic stability.”
The agreement is subject to approval by the IMF’s executive board and confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.
Pakistani media outlets reported that the deal would bring a much-needed respite to the country.
The government has introduced new tax reforms to fix the country’s finances. Authorities will need to convince people that such unpopular measures are needed to achieve fiscal stability.