In a positive economic development, Pakistan seek another $1.3 billion for budgetary support

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In a positive economic development, Pakistan seek another $1.3 billion for budgetary support

ISLAMABAD - In a positive economic development, Pakistan seek another $1.3 billion for budgetary support.The Asian Development Bank (ADB) Friday approved $1.3 billion for budgetary support and key reforms in Pakistan, said an official ADB press release.

The ADB approved $1.3 billion in immediate budgetary support to Pakistan to “shore up the country’s public finances” and help strengthen a “slowing economy”, said a statement released by the bank.

The quick dispersing Special Policy-Based Loan is part of a comprehensive multidonor economic reform programme led by the International Monetary Fund (IMF) to stabilise Pakistan’s economy after a major deterioration in its fiscal and financial position in mid-2018 caused growth to slump and threatened progress in alleviating poverty.

The bank said it approved the financing after the government implemented a series of IMF-supported reforms and actions to improve its current account deficit, strengthen its revenue base, and protect the poor against the social impact of the economic crisis.

ADB approved policy-based loan that will help the government to address financial sustainability, governance, and energy infrastructure policy constraints in the energy sector.

The financing will support the first of three sub-programmes totaling $1.3 billion under the Energy Sector Reforms and Financial Sustainability Program, a key component of a comprehensive multi-donor economic reform programme led by IMF.

The cash shortfall across the power supply chain in Pakistan, also known as circular debt, has shot up to more than $10 billion and is a longstanding chronic issue ailing the country’s power sector, the press release added.

The bank said that the energy reform programme aims to address the underlying causes of circular debt with a focus on improving inadequate tariff and subsidy systems, strengthening energy accounting, and reducing generation costs.

Pakistan