[TIMELINE] A brief history of relationship with IMF: When and why Pakistan took loans

Pakistan's relationship with IMF is 60 years old.

Pakistan and IMF have signed 22 agreements for loans since 1958. With the current agreement, Pakistan loans have further soared with an additional burden of $6 billion bailouts. 

International Monetary Funds (IMF) is an international organisation having 189 member countries. It is working to foster global monetary cooperation, secure financial stability and promote sustainable growth. Basically, it performs the following three roles:

  • to monitor the economic and financial policies of its member countries
  • to lend and pull member countries out of the economic crisis (which will be discussed later in the context of Pakistan loans)
  • to modernize economic policies and institutions.

    At glance: Pakistan loans and IMF

After the recent agreement, Pakistan and IMF have signed a total of 22 deals. SBAs or Stand-by Agreements alternatively are short-term loans which need to be paid back in 3.5 to 5 years. These loans are usually given up over a period of 12 to 16 months. The recent deal includes a $6 Billion package, which will be given over a period of three years.

“Pakistan is facing a challenging economic environment, with lacklustre growth, elevated inflation, high indebtedness, and a weak external position” Ernesto Ramirez Rigo, who led the I.M.F. mission to Pakistan, said in a news release Sunday.

The IMF offers a total of 10 programs through its PRGT (Poverty Reduction Growth Trust) and GRA (General Resource Account). Of these, Pakistan has taken loans under four of these programs. Not all 21 of these agreements are what we call ‘bail-outs’. Pakistan has entered 12 bailouts.

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The remaining nine agreements were given under PRGT (Poverty Reduction Growth Trust) aimed at poverty alleviation and structural reforms. They are aimed at protecting smaller weaker economies against the effects of a broader international crisis.

Pakistan and IMF:

  • 2019 Projected Real GDP (% Change) : 2.9
  • 2019 Projected Consumer Prices (% Change): 7.6
  • Country Population: 204.729 million
  • Date of Membership: July 11, 1950
  • Article IV/Country Report: July 13, 2017
  • Outstanding Purchases and Loans (SDR): 4153 million (March 31, 2019)
  • Special Drawing Rights (SDR): 269.24 million
  • Quota (SDR): 2031.0 million
  • Number of Arrangements since membership: 21

(Source: IMF)

Here is a pictorial representation of Pakistan’s relationship with IMF:

Pakistan’s 60-year history with the IMF in one chart –
Hisham Sajid (Samaa TV)


Country Data (Source: IMF)


Pakistan’s country data

The loans are now longer and larger:

Trends in Pakistan loans

With Pakistan loans, there is an interesting trend that one can witness. The loans are now larger and longer. The payout period is increasing

Hisham Sajid analyzes the trends in his piece Pakistan’s 60-year history with the IMF in one chart. Hisham says that it is interesting to see how the loans are now getting longer but subsequently larger as well. For example, all the loans between 1958 and 1977 (seven programs, all were bail-outs or Stand-by Agreements) were one year long.

Between 1980 and 1995, another seven programs were signed, and interestingly, instead of one year, they were one to two years long. Between 1997 and 2013, PML-N took out the last $6.4 billion loan and there were a total of six programs. Besides one program, all others were approximately three years long.

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