Pakistan's economic condition has been in a delicate state for the last few years. Foreign exchange reserves are continuously decreasing, inflation rate is at its peak and the balance of import-export is continuously deteriorating. In such a situation, the country is constantly looking towards international lenders to support its economy.
Due to the strict conditions of the IMF (International Monetary Fund), it was necessary for Pakistan to maintain a minimum foreign exchange reserve of $ 14 billion, which was to be completed by june 30, 2025. Keeping this deadline in mind, china has come forward and helped pakistan by giving a loan of $ 3.4 billion. This amount is not just an economic cooperation but also a diplomatic message that China still remains a strategic and economic partner of Pakistan.
Additional assistance received from the Middle east and other sources
According to a Reuters report, not only china, but other commercial taxpayers of the Middle east have also come forward to help Pakistan. Overall, pakistan has received an additional loan of $1 billion from commercial sources in the Middle east, while about $500 million has been raised from multilateral funding agencies.
The main objective of these efforts is to meet the conditions set by the IMF and increase the foreign exchange reserves to a respectable level. This funding is like a lifesaver for pakistan, as it will not only provide short-term relief to the country, but will also send a positive message to the international market.
IMF assistance and India's concerns
Recently, the IMF has also given a loan of one billion dollars to pakistan, about which India has expressed its concern. India believes that this loan can be used to nurture cross-border terrorism. Despite this, the IMF clarified that pakistan had fulfilled all the prescribed conditions for obtaining the loan. It is necessary to clarify here that IMF assistance is based only on economic data and not on geopolitical concerns, but India's concerns are not baseless. Pakistan uses this money for military work.
Will pakistan sail through?
The $3.4 billion loan is definitely an immediate relief, but it is not a permanent solution. This loan will be used to stabilize foreign exchange reserves, pay off loans and control imports, but can it ensure long-term economic growth? Analysts believe that if pakistan does not focus on internal economic reforms, dependence on foreign debt will become a permanent problem. Increasing the tax base, promoting exports and controlling corruption will be the permanent solutions for Pakistan.
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