Pakistan PM Shehbaz Sharif Seeks $1.5 Billion Loan from IMF for Climate Change
Islamabad [Pakistan], September 27: Pakistan has asked the International Monetary Fund (IMF) for an additional $1.5 billion loan to address climate change issues. Prime Minister Shehbaz Sharif met IMF Managing Director Kristalina Georgieva during the 79th session of the United Nations General Assembly (UNGA) in New York.
During their meeting, PM Sharif emphasized the urgent need for action to combat climate change in Pakistan. The requested loan will support Pakistan’s Climate Resilience and Sustainability Facility, aimed at promoting economic stability and sustainable development.
Sharif praised the IMF’s technical assistance and capacity-building programs, which have strengthened Pakistan’s institutions and improved economic management. Georgieva highlighted the importance of maintaining macroeconomic stability and promoting inclusive and sustainable growth.
Both leaders discussed the need to mobilize adaptation financing for climate change. PM Sharif agreed to have the Finance Minister address this critical issue with senior IMF management during the Annual Meetings in October. They also agreed to enhance cooperation between the government and the IMF to promote economic stability and growth.
Earlier, the IMF released the first tranche of $1 billion to Pakistan as part of a $7 billion loan under the Extended Fund Facility. However, the Sharif government faced challenges, securing only $436.4 million in foreign assistance and grants in July, significantly less than the previous year.
In July last year, Pakistan received over $2.89 billion, largely due to a 9-month $3 billion Stand-By Arrangement with the IMF, which included a $2 billion deposit from Saudi Arabia. Total inflows in July 2023 reached $5.1 billion, including $1.2 billion from the IMF and $1 billion from the UAE. In August, Pakistan’s Ministry of Economic Affairs reported $436.39 million in foreign inflows, compared to $2.89 billion in the same month last year.
Doubts Revealed
Pakistan -: Pakistan is a country in South Asia, located next to India.
PM Shehbaz Sharif -: PM Shehbaz Sharif is the Prime Minister of Pakistan, which means he is the head of the government there.
$1.5 Billion -: $1.5 billion is a very large amount of money. In Indian rupees, it is around 12,000 crore.
IMF -: IMF stands for International Monetary Fund. It is an organization that helps countries with money and economic advice.
Climate Change -: Climate change means the Earth’s weather is changing, causing problems like more floods, droughts, and heatwaves.
Kristalina Georgieva -: Kristalina Georgieva is the Managing Director of the IMF. She helps manage the IMF’s work and decisions.
UNGA -: UNGA stands for United Nations General Assembly. It is a big meeting where leaders from all over the world discuss important issues.
New York -: New York is a big city in the United States where many important meetings and events happen.
Climate Resilience and Sustainability Facility -: This is a special program to help Pakistan deal with problems caused by climate change and make sure the country can handle future challenges.
Economic stability and growth -: Economic stability means having a steady and strong economy. Growth means the economy is getting bigger and better.
$7 billion loan -: This is a very large loan given by the IMF to Pakistan to help its economy. In Indian rupees, it is around 56,000 crore.
Extended Fund Facility -: This is a special type of loan from the IMF that helps countries with long-term economic problems.