'China saved us from default...': What Pakistan PM Shehbaz Sharif said after clinching $3 billion IMF bailout
2 min read 30 Jun 2023, 08:03 PM ISTPakistan's Prime Minister Shehbaz Sharif praised China for rescuing the country from default as Pakistan closed in on a $3 billion IMF bailout. The deal offers some respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.
PremiumPakistan Prime Minister Shehbaz Sharif lauded China for 'saving' his country from default amid an ongoing financial crisis. The remarks came even as Islamabad closed in on a $3 billion IMF bailout on Friday - mere hours before the country's current agreement expires. The PM said that discussions had ended on a positive note, with the deal now subject to approval by the IMF board in July.
“IMF talks have concluded on a very positive note. Paris meeting with IMF MD was a turning point…During this period China saved Pakistan from default," he said.
Sharif also thanked Saudi Arabia and the United Arab Emirate for their financial help over the past months. All three nations had extended financial aid to the country as it remained in the throes of a major economic crisis earlier this year. Pakistan had received a rollover loan of $2 billion from its "all-weather" ally China, followed weeks later by Saudi Arabia approving funding of an additional USD 2 billion in deposits.
The deal comes after an eight-month delay and offers some respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves. As reports quoting IMF mission chief Nathan Porter noted, Pakistan’s economy has faced several heavy blows recently. The long list includes the devastating floods last summer that killed 1,739 people, caused $30 billion in damage and impacted millions of Pakistanis. The country had also been affected by an international commodity price spike in the wake of the ongoing Ukraine-Russia war.
In a statement the top IMF official said that reserves have declined to very low levels and liquidity conditions in the power sector also remain acute in spite of efforts to educe imports and the trade deficit.
“Given these challenges, the new arrangement would provide a policy anchor and a framework for financial support from multilateral and bilateral partners in the period ahead," an IMF statement read.
(With inputs from agencies)
