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The IMF has labeled Pakistan’s external debt repayment capacity as fragile, estimating the country will require $62.6 billion in external financing over the next three years under the Extended Fund Facility (EFF) program. Looking ahead, these financing needs could surge to $110.5 billion between 2024 and 2029. For the current fiscal year, the IMF anticipates financing needs of $18.813 billion, rising to $23.714 billion by 2026-27. High public debt, low foreign reserves, and sociopolitical instability pose significant risks to Pakistan’s repayment ability. However, a reduced gross financing requirement for FY25, dropping to $18.8 billion, provides a more hopeful scenario. . . . #PakistanEconomy #IMF #DebtRepayment #EconomicStability #Finance #Tribunetrends

📈 Good News for Pakistan! 📈 Fitch Ratings has upgraded Pakistan’s Long-Term Issuer Default Rating to ‘CCC+’, up from ‘CCC’, thanks to the recent $7 billion IMF agreement. This upgrade reflects stronger external funding confidence and positive economic forecasts. With significant external financing secured and expected improvements in reserves and fiscal balance, Pakistan is on a path to economic stability. 🌟 #fitchratings #pakistanfinance #economicupdate #imf #ratingupgrade #financialnews #economicgrowth #pakistan #globalfinance #financialstability #externalfunding #investment #economy https://lnkd.in/d6EmHHnp

Ethiopia Granted Extension by Paris Club for IMF Bailout Talks Ethiopia's official international creditors have granted an extension until the end of June to finalize discussions on International Monetary Fund (IMF) support. The previous deadline had expired, and despite a recent visit by the IMF to discuss the country's request for assistance, no agreement was reached. The Paris Club, a group of developed creditor nations, had initially stated that the suspension of Ethiopia's debt payments through 2025 could be revoked if an IMF loan was not secured by March 31. However, the deadline has now been extended to maintain momentum in reaching a staff-level agreement with the IMF. Ethiopia, facing financial challenges, defaulted on a $1 billion Eurobond coupon payment in December, becoming the third African nation to default in as many years. Ethiopia has been granted an extension until the end of June by its official international creditors to finalize discussions on International Monetary Fund (IMF) support, following the expiration of a previous deadline. Despite a recent visit by the IMF to discuss Ethiopia's request for assistance, no agreement was reached. The Paris Club of developed creditor nations, which had previously indicated that a suspension of Ethiopia's debt payments through 2025 could be revoked if an IMF loan was not secured by March 31, has now extended the deadline. This move aims to maintain momentum in reaching a staff-level agreement with the IMF. Ethiopia, facing financial challenges, defaulted on a $1 billion Eurobond coupon payment in December, becoming the third African nation to default in many years. #Ethiopia #IMFSupport #ParisClub #DebtNegotiations #FinancialCrisis

#Pakistan’s #Economy: On the Brink of #Transformation 🚀 (16th Mar 2024): The Journey to Enhanced #IMF Support 💼 Pakistan stands at a pivotal moment, ready to engage in crucial talks with the IMF from 14th Mar to 18th Mar. This engagement is not just a routine check-in; it’s a strategic move towards securing a brighter economic future. The discussions will revolve around the last review of the SBA program and, more importantly, lay the groundwork for the next IMF program1. A Leap of Preparedness 🌟 In a significant shift from the past, Pakistan enters these discussions with a proactive stance. The actions required for the new program have been primarily implemented, showcasing the nation’s commitment to economic reform and stability2. Anticipating a Financial Boost 💸 With the successful completion of the SBA program’s last review on the horizon, Pakistan is poised to receive a substantial disbursement of around USD 1.1bn by Apr’242. This infusion of funds is expected to act as a catalyst for economic growth and development. Navigating Through Debt 🧭 Despite the optimism, Pakistan faces the challenge of heavy external debt servicing obligations. The total gross financing needs for FY25 are projected to be a staggering USD 22bn2. The fourth quarter of FY24 alone has repayments due amounting to USD 4.33bn, including: USD 1bn for Pakistan’s International Bond maturing in Apr’24 USD 1bn to China as part of a Chinese SAFE deposit, with hopes for a rollover USD 706mn to bilateral creditors USD 754mn to multilateral creditors, including significant amounts to the ADB and the World Bank’s IDA2. Charting a New Course 🛤️ With these substantial repayments, Pakistan is gearing up to negotiate a new program with the IMF. The options on the table reflect a strategic and diversified approach: Enhancing the funds in the existing Standby Arrangement program of Jun’23 Considering a new Extended Fund Facility (EFF) Exploring a combination of the Extended Fund Facility with the newly established Resilience and Sustainability Facility (RSF)2. #PakistanEconomy #IMFSupport #EconomicGrowth #DebtManagement #FinancialResilience 🌐📈 Let’s embrace this transformative phase with hope and determination as Pakistan strides towards economic resilience and prosperity. Together, we can turn challenges into opportunities for a thriving future! 🌱🤝

The Executive Board of the International Monetary Fund (IMF) will convene today in Washington to approve a critical $7 billion loan package for Pakistan, aiming to stabilize the country's fragile economy. This new bailout program, spanning 37 months, marks Pakistan's 24th IMF assistance package. With its approval, Pakistan will also be eligible to receive funds from other international organizations and countries. The expected approval of the loan follows a staff-level agreement reached between Pakistan and the IMF on July 12. Pakistani officials have confirmed that all preconditions for the loan, including securing $2 billion in additional financing and consolidating $12.7 billion in debt, have been fulfilled. China, Saudi Arabia, the UAE, and Kuwait have also provided crucial support by deferring Pakistan’s loan payments for one year. As part of the IMF's preconditions, Pakistan has borrowed from international commercial banks at an interest rate of 11%, one of the highest rates in the country’s history. Also Read: Pakistan needs $100bn in external financing by 2027 amid financial challenges Finance Ministry officials revealed that Pakistan has to repay $100 billion in debt over the next four years. Additionally, loans from friendly countries will need to be rolled over annually, while additional external financing of $5 billion is projected to be required within the next three years. To meet the stringent demands of the IMF program, Pakistan will need to gradually raise its tax-to-GDP ratio by 3% over the same period. Sectors such as retail, wholesale, exports, and agriculture are expected to be brought under the tax net, as the government looks to increase revenues. Finance Ministry officials emphasized that the loan package will not only provide vital funds but will also unlock additional financial assistance from other international organizations and countries. This assistance is expected to help Pakistan mitigate the ongoing economic crisis and implement necessary reforms for long-term stability. #IMF #board #meet #approve #loan #Pakistan #247newsupdate

#Ethiopia clears International Monetary Fund loan review to unlock $340.7 million payment The International Monetary Fund's executive board has completed its first review of Ethiopia's Extended Credit Facility, approving a disbursement of $340.7 million. This latest disbursement, part of a $3.4 billion financing package approved in July 2024, brings total disbursements to $1.363 billion. "Ethiopian authorities have shown strong commitment to their home-grown economic reform program," the IMF stated. "Implementation of ECF-supported reforms is advancing well." Ethiopia, which seeks to restructure its $28.9 billion external debt under the Common Framework, has implemented significant reforms including foreign exchange market liberalization and the adoption of a targeted monetary policy rate. The country had defaulted on a commercial loan repayment in December. "The spread between the formal and parallel market exchange rates has narrowed to low levels, with little sign of disruption to the broader economy," according to the IMF statement. "The supply of foreign exchange is picking up, helping alleviate acute foreign exchange shortages." However, the IMF noted that "some unmet foreign exchange demand persists as economic agents are still adjusting to the new FX regime." Following the IMF agreement, the World Bank has committed $16.6 billion in additional funding to Ethiopia over the next three years. https://lnkd.in/ex4R3ySe

IMF Mission Visits Ethiopia as Nation Navigates Loan Deadline Pressure A senior finance ministry official confirmed on Thursday that a staff mission from the International Monetary Fund (IMF) is currently in Ethiopia, signaling the nation's efforts to meet a critical deadline with major creditor countries for securing a loan from the international lender. Last month, IMF spokesperson Julie Kozack announced plans for the fund to dispatch a mission to the Horn of Africa nation to discuss its request for a loan program. However, the purpose of the current visit by the IMF mission was not disclosed by the ministry official. Ethiopia faces mounting pressure to secure financial assistance, especially after the Paris Club of developed creditor nations indicated that the agreement to suspend debt payments until 2025 could be revoked if the country fails to secure an IMF loan by March 31, 2024. Additionally, Ethiopia's recent default on its $1 billion Eurobond further underscores the urgency of the situation. In December, Reuters reported that Ethiopia is in discussions with the IMF to borrow approximately $3.5 billion under a reform program, according to three sources familiar with the matter. As Ethiopia grapples with economic challenges exacerbated by the COVID-19 pandemic and internal conflicts, the outcome of the IMF mission's visit is anticipated to have significant implications for the nation's financial stability and its ability to meet its debt obligations. #IMF #Ethiopia #LoanDeadline #EconomicReform #DebtCrisis #FinancialAssistance #InternationalLender

The IMF has described Pakistan's external debt repayment capacity as fragile, estimating the country’s external financing needs to reach $62.6 billion over three years under the Extended Fund Facility (EFF) program. Over a five-year period (2024-29), these needs could rise to $110.5 billion. The IMF projects $18.813 billion in financing needs for the current fiscal year, escalating to $23.714 billion by 2026-27. High risks from public debt, low reserves, and sociopolitical factors could undermine repayment capacity. However, a significant reduction in gross financing requirements for FY25, down to $18.8 billion, offers a more optimistic outlook. #PakistanEconomy #IMF #ExternalDebt #FinancialChallenges #EconomicOutlook #DebtRepayment #PublicDebt #SociopoliticalFactors #FinancingNeeds #ExtendedFundFacility #FiscalPolicy #EconomicStability #DebtCrisis #PakistanUpdates

Pakistan stands at the brink of securing its 24th bailout from the International Monetary Fund (IMF), a staggering figure that highlights the country’s reliance on international financial assistance. This latest bailout, a $7 billion 37-month extended fund facility, follows the IMF’s release of a $1.1 billion tranche in April 2024, which completed a $3 billion stand-by arrangement signed in July 2023. While these IMF interventions have repeatedly saved Pakistan from defaulting on its international debt obligations, they have also plunged the country deeper into a vicious cycle of debt accumulation, with significant consequences for its economic stability and political landscape. https://bit.ly/3YlcO8K

The IMF has described Pakistan's external debt repayment capacity as fragile, estimating the country’s external financing needs to reach $62.6 billion over three years under the Extended Fund Facility (EFF) program. Over a five-year period (2024-29), these needs could rise to $110.5 billion. The IMF projects $18.813 billion in financing needs for the current fiscal year, escalating to $23.714 billion by 2026-27. High risks from public debt, low reserves, and sociopolitical factors could undermine repayment capacity. However, a significant reduction in gross financing requirements for FY25, down to $18.8 billion, offers a more optimistic outlook. #PakistanEconomy #IMF #DebtRepayment #EconomicStability #Finance