Pakistan has secured agreements for a $1 billion loan from two Middle Eastern banks, with terms set at 6%-7% interest rates, as the country seeks additional financing. The loans, which are short-term, are part of Pakistan’s efforts to stabilize its economy following the IMF’s $7 billion bailout package in September 2024. Finance Minister Muhammad Aurangzeb, speaking at the World Economic Forum (WEF) Annual Meeting in Davos, confirmed the agreements and discussed Pakistan’s ongoing economic reforms.
Aurangzeb explained that the first formal review of the IMF’s Extended Fund Facility (EFF) would take place in February 2025, and he expressed confidence in a positive outcome. The finance minister also highlighted the government’s efforts to attract global investment in key sectors, such as agriculture, IT, renewable energy, and pharmaceuticals, to fuel the country’s economic transformation.
Despite challenges, including the impact of COVID-19 and devastating floods, Pakistan’s economic reforms have shown positive results, with growth showing signs of resilience. The finance minister emphasized that the reforms include stabilizing the exchange rate, improving fiscal policies, and addressing inflation. Additionally, the government’s economic transformation plan, ‘Uraan Pakistan,’ aims for 6% GDP growth by 2028 through public-private partnerships and sectoral improvements.
The initiative also focuses on collaboration with the World Bank on a $20 billion project aimed at improving education, health, poverty alleviation, and climate resilience. By addressing these critical issues, Pakistan is contributing to global sustainability goals. The finance minister urged global stakeholders to support Pakistan’s economic journey by investing in its key sectors and leveraging opportunities in Special Economic Zones (SEZs).
In response to ongoing economic challenges, Aurangzeb stressed the importance of structural reforms in revenue collection, energy, and state-owned enterprises to reduce Pakistan’s reliance on external assistance. The government is also modernizing its tax administration to increase revenue and ensure economic stability.
