Pakistan became fourth biggest IMF debtor

Pakistan became fourth biggest IMF debtor

Pakistan is set to become the fourth-largest borrower from the International Monetary Fund (IMF) globally, as it secures additional loans amounting to $3 billion over the next nine months under the standby arrangement.

Based on the IMF’s data as of March 31, 2023, Pakistan currently holds the fifth position on the list of countries with the highest borrowing from the IMF. However, with the recent approval of an additional $3 billion under the standby arrangement, Pakistan will move up to the fourth spot.

Read more | US pulling IMF to turn heat on Pakistan

Other countries in the IMF list

Previously, in terms of IMF loans, Argentina held the first position with $46 billion, followed by Egypt at second place with $18 billion, Ukraine at third with $12.2 billion, Ecuador at fourth with $8.2 billion, and Pakistan at fifth with $7.4 billion.

With the new loans totaling $10.4 billion, Pakistan will surpass Ecuador and become the fourth-largest borrower from the IMF worldwide. As of March 31, 2023, the IMF had issued loans of $155 billion or 115.2 billion special drawing rights (SDRs) to stabilize the global financial position and support struggling economies.

The value of a SDR on March 31 was calculated at $1.345 and is used by the IMF as a unit of account to assess the value of assistance provided to member countries.

Although the IMF has a total of 93 countries with outstanding debts, the top 10 debtors, including Pakistan, account for a significant portion of 71.7% of the total balance of $155 billion.

Pakistan holds the distinction of being the largest borrower from the IMF in the Asian region. Other Asian countries, such as Sri Lanka, Nepal, Uzbekistan, the Kyrgyz Republic, Armenia (West Asia), and Mongolia, have borrowed far less from the global lender compared to Pakistan.

In August 2022, Pakistan received $1.1 billion from the IMF as part of a $6.5 billion program agreed upon in July 2019. Due to spillovers from the war in Ukraine and domestic challenges, Pakistan is facing a severe balance of payments crisis. Out of the IMF’s member countries, only 19 have debts exceeding $1 billion.

Read more | Economic Crises & Political Misery in Pakistan

The high ranking of Pakistan in the list of IMF borrowers emphasizes the need for sustainable development in the country, focusing on breaking free from the debt trap rather than solely highlighting loan approvals from the IMF under standby arrangements. An integrated plan should be implemented to move Pakistan in this direction.

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The Diplomat John Abraham

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