{
  "title": "IMF Survey: Pakistan Gets $7.6 Billion Loan from IMF",
  "publication": "IMF News, November 24, 2008",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/socar112408c",
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  "summary": "The IMF approves a $7.6 billion loan for Pakistan to support its program to stabilize and rebuild the economy while expanding its social safety net to protect the poor. The South Asian country will receive $3.1 billion immediately to bolster its reserves.",
  "publishDate": "2008-11-24",
  "sections": [
    {
      "heading": "Executive summary",
      "content": "- The IMF's Executive Board approved a $7.6 billion loan for Pakistan to support a stabilization and rebuilding program while expanding the social safety net to protect the poor.\n- Of the $7.6 billion loan, $3.1 billion will be made available by the IMF immediately to strengthen Pakistan's reserves.\n- The loan is a 23-month Stand-By arrangement intended to underpin fiscal and monetary tightening to reduce inflation and the external current account deficit."
    },
    {
      "heading": "Program objectives and measures",
      "content": "- Primary objectives:\n  - Restore overall economic stability and confidence through tightening of macroeconomic policies.\n  - Ensure social stability and adequate support for the poor during the adjustment process.\n- Key measures envisaged for the coming 24 months:\n  - Fiscal consolidation:\n    - Fiscal deficit, excluding grants, will be brought down from 7.4 percent of GDP in 2007/08 (starting July 1) to 4.2 percent in 2008/09 and 3.3 percent in 2009/10.\n    - Adjustment will be achieved primarily by phasing out energy subsidies and strengthening revenue mobilization through tax policy and administration measures.\n    - Reduction in expenditures will create room to increase spending on the social safety net.\n  - Monetary policy and reserves:\n    - The State Bank of Pakistan (SBP) will act to build international reserves, bring down inflation to 6 percent in 2010, and eliminate central bank financing of the government.\n    - The program includes measures to improve monetary management, enhance SBP's bank resolution capacity, and avoid use of public resources to support the stock market.\n  - Social protection:\n    - Increase expenditure on the social safety net via cash transfers and targeted electricity subsidies.\n    - The fiscal program for 2008/09 envisages an increase in spending on the social safety net of 0.6 percentage points of GDP to 0.9 percent of GDP.\n    - Pakistan will work with the World Bank to prepare a more comprehensive and better targeted social safety net program."
    },
    {
      "heading": "IMF contribution and international support",
      "content": "- Immediate financing:\n  - $3.1 billion of the $7.6 billion will be available immediately to bolster reserves.\n- Monitoring and ownership:\n  - The program and its conditionality are based on targets and measures set by the Pakistani authorities for the next two years; IMF monitoring will assess progress and allow adjustments if circumstances change.\n- Donor mobilization:\n  - There is an urgent need to mobilize additional donor support to strengthen resilience, finance the expanded social safety net, and allow higher spending on development programs.\n  - The Fund stands ready to participate in donor meetings to provide economic and financial analysis to underpin expanded support.\n- IMF capacity:\n  - The IMF has more than $200 billion in lendable resources and is ready to process loan proposals quickly through its Emergency Financing Mechanism."
    },
    {
      "heading": "Risks and implementation",
      "content": "- Identified risks to program success:\n  - Security and implementation uncertainties.\n  - A more severe-than-anticipated slowdown in economic activity in trading partners.\n  - Lower-than-expected private capital inflows.\n- Implementation message:\n  - \"Sustained and forceful implementation will be key to the success of the program,\" said Juan Carlos Di Tata."
    },
    {
      "heading": "Background and recent performance",
      "content": "- Pakistan context:\n  - Population cited as 170 million people.\n- Previous macroeconomic performance:\n  - From 2000/01-2004/05, when Pakistan implemented two IMF-supported programs, real GDP growth averaged 5 percent a year with relative price stability.\n  - Macroeconomic situation deteriorated significantly in 2007/08 and the first four months of 2008/09 due to adverse security developments, large exogenous price shocks (oil and food), and the global financial turmoil.\n- Recent policy steps taken by authorities:\n  - Energy subsidies have been cut.\n  - Interest rates have been increased to tighten monetary policy.\n\nIMF Survey: Pakistan Gets $7.6 Billion Loan from IMF\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Country Focus\n- Pakistan and the IMF\n- Outlook for region\n- Asian growth to slow sharply\n- IMF Pakistan website\n- World leaders combat crisis\n- Emergency Financing Mechanism\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/socar112408c"
    }
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    "Published: November 24, 2008",
    "The IMF's Executive Board approved a $7.6 billion loan for Pakistan to support a stabilization and rebuilding program while expanding the social safety net to protect the poor.",
    "Of the $7.6 billion loan, $3.1 billion will be made available by the IMF immediately to strengthen Pakistan's reserves.",
    "The loan is a 23-month Stand-By arrangement intended to underpin fiscal and monetary tightening to reduce inflation and the external current account deficit.",
    "Primary objectives:",
    "Key measures envisaged for the coming 24 months:",
    "Immediate financing:",
    "Monitoring and ownership:",
    "Donor mobilization:",
    "IMF capacity:",
    "Identified risks to program success:",
    "Implementation message:",
    "Pakistan context:",
    "Previous macroeconomic performance:",
    "Recent policy steps taken by authorities:",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Country Focus](https://www.imf.org/en/news/country-focus)",
    "[Pakistan and the IMF](https://www.imf.org/external/country/PAK/index.htm)",
    "[Outlook for region](http://www.imf.org/external/pubs/ft/reo/2008/MCD/eng/mreo1008.htm)",
    "[Asian growth to slow sharply](http://www.imf.org/external/pubs/ft/survey/so/2008/CAR112408A.htm)",
    "[IMF Pakistan website](http://www.imf.org/external/country/PAK/rr/)",
    "[World leaders combat crisis](https://www.imf.org/external/pubs/ft/survey/so/2008/NEW111508A.htm)",
    "[Emergency Financing Mechanism](https://www.imf.org/external/pubs/ft/survey/so/2008/POL100908B.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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