Chinese Banks Come to Pak Rescue With $2.3 Billion Funding
ISLAMABAD, (ANI) – China on June 2 agreed to refinance Pakistan with $2.3 billion worth of funds amid the dwindling foreign exchange reserves of the country.
This development comes as the restoration of the country’s delayed International Monetary Fund (IMF) program depends on the government’s capacity to make a fiscal adjustment of about 2.5 percent of the GDP. The adjustments can be made by increasing the revenues and reducing the expenditure in the next budget.
To demonstrate its commitment to implement the ‘reform agenda’, the Pakistan government must end the petrol and diesel prices subsidy, raise electricity tariffs make fuel price adjustments, and increase gas tariffs by 20 percent on average.
The IMF wants rapid adjustments on the fiscal front to bring the economy back on the stabilization path. The announcement of the next budget for 2022-23 aligned with IMF policies will set the stage for a stabilization path.