Global General

IMF offers $1.13B loan to aid Pakistan

(Xinhua)
Updated: 2010-05-15 19:07

ISLAMABAD - The International Monetary Fund (IMF) released $1.13 billion of loan to Pakistan as the country's economy still shows vulnerability due to persistent inflation and volatile security situation, local media reported Saturday.

Despite concerns IMF cautiously notices some improvement in Pakistan's economy. The Fund said Pakistan's economic conditions had improved even though the country faces "adverse security developments and a rapidly changing political environment," ARY TV reported.

The IMF has so far extended $7.7 billion including the current installment to Pakistan. It has also agreed to grant some waivers on Pakistani request including combining the remaining three installments into two after assurance of implementation of Value Added Tax (VAT) and increasing budget deficit.

"There is no other option but to take the loan," Syed Zafar Ali Shah, Pakistani former Finance Adviser, commented about the economy of 170 million inhabitants Islamic republic that heavily depends on foreign loans and aid packages and is the frontline state in the war-against-terror.

Meanwhile, the private TV GEO quoted Pakistani Finance Advisor Abdul Hafeez Shaikh as saying that approval of installment of loan from IMF reflects confidence on the government policies.

On the other side, the IMF said Pakistan's economy remained highly vulnerable, and listed worry spots ranging from persistent inflation to security-related spending pressures.