Pakistan has reached a staff-level agreement with the International Monetary Fund (IMF) for a $7 billion bailout after meeting the lender’s requirements in its annual budget. The IMF announced this agreement, praising Pakistan for adhering to the terms of the Stand-by Arrangement (SBA) signed by the Shehbaz Sharif-led PDM government in 2023.

The funds will be disbursed over three years, contingent upon Pakistan fulfilling its commitments to the IMF. These commitments include implementing comprehensive taxation reforms and privatizing state-owned enterprises. Pakistan is also required to secure additional loans from allies like China, Saudi Arabia, and the UAE.

Read more: Pakistan Expected to Secure $6 Billion IMF Bailout

According to the IMF’s statement, the new 37-month Extended Fund Facility (EFF) builds on the economic stability achieved under the 2023 SBA and is awaiting approval by the IMF’s Executive Board. The program’s objectives are to enhance macroeconomic stability and create conditions for stronger, more inclusive, and resilient growth.

Key components of the program include strengthening fiscal and monetary policies, broadening the tax base, improving the management of State-Owned Enterprises (SOEs), fostering competition, creating a level playing field for investment, enhancing human capital, and expanding social protection through increased support and coverage in the Benazir Income Support Program (BISP).

The IMF emphasized that sustained financial support from Pakistan’s development and bilateral partners is crucial for the program’s success.