After obtaining an additional $3 billion in loans from the IMF under the standby agreement over the next nine months, Pakistan will become the fourth largest IMF borrower in the world.
As of March 31, 2023, Pakistan was the fifth greatest borrower from the IMF, according to the lender’s records, but after getting an additional $3 billion over the next nine months under the standby arrangement signed two days ago, it has moved up to the number four spot.
Previously, the countries receiving the most IMF loans were as follows: Argentina (with $46 billion), Egypt ($18 billion), Ukraine ($12.2 billion), Ecuador ($8.2 billion), Pakistan ($7.4 billion).
Pakistan, with its new IMF loan of $10.4 billion, will replace Ecuador as the world’s fourth-largest borrower.
As of March 31st, this year, the IMF has loaned a total of $155 billion, or 115.2 billion special drawing rights (SDRs), in an effort to stabilize global currency markets and prop up struggling economies around the world.
This sum is based on the March 31st, this year, value of a Special Drawing Right (SDR) as reported by the International Monetary Fund (IMF), which was $1.345.
The value of the aid the international financial institution provides to its member countries is measured in terms of the Special Drawing Rights (SDR).
While 93 nations as a whole owe money to the IMF, the top 10 debtors—among them Pakistan—constitute 71.7% of the total $155 billion in debt.
The “title” of Asia’s largest borrower from the IMF also belongs to Pakistan.
When compared to Pakistan, other Asian countries that borrowed from the IMF include Sri Lanka, Nepal, Uzbekistan, the Kyrgyz Republic, Armenia (West Asia), and Mongolia.
As part of a $6.5bn program agreed upon in July 2019, the IMF lent Pakistan $1.1bn in August 2022.
The country is in the midst of a severe balance of payments crisis due to the conflict in Ukraine and domestic difficulties. Of the 189 countries that make up the IMF, just 19 have debts of $1 billion or more.
The acceptance of a loan from the global lender under the standby arrangement is less noteworthy than Pakistan’s high position in the list of IMF debtors, which calls for sustainable growth by rescuing the country from its debt trap. The country needs to implement a comprehensive strategy to get there.
To read our article about “Pakistan to refund $10.35 bn foreign debt till Dec end 2023” click here.
