ISLAMABAD, July 14 ― The International Monetary Fund said today it had agreed with Pakistan to resume a suspended loan programme that will inject US$1.17 billion into the struggling economy.
The new agreement follows months of deeply unpopular belt-tightening by the government of Shehbaz Sharif, which took power in April and has effectively eliminated fuel subsidies and introduced new measures to broaden the tax base. The new government has slashed a raft of subsidies to meet the demands of global financial institutions but risks the wrath of an electorate already struggling under the weight of double-digit inflation.
In a bid to secure the IMF loan, Prime Minister Sharif has imposed three fuel price hikes ― cumulatively totalling 50 per cent ― and raised the cost of electricity to effectively end the subsidies introduced by Khan.