The IMF released another tranche of its bailout package to Sri Lanka, signaling a fragile economic recovery. However, significant debt restructuring with both bondholders and bilateral creditors remains critical for the country’s long-term stability.
Krishnamurthy Subramanian, Executive Director of the International Monetary Fund (IMF), stresses the importance of distinguishing between productive and unproductive debt. He warns that taking debt for freebies or revenue expenditure can lead to a debt trap, while debt for capital expenditure and asset creation is beneficial for economic growth. Subramanian also explains why countries should not blame the IMF for the tough measures required during bailouts, as these measures are a consequence of past economic mismanagement.
Pakistan has secured a $7 billion bailout package from the IMF, its 24th such rescue. The deal comes with harsh conditions including job cuts, ministry closures, and tax hikes, which are likely to be unpopular. Despite the government’s optimism, the bailout’s success hinges on Pakistan’s commitment to reforms and ability to implement them.
Pakistan has secured vital funding assurances from key allies – China, Saudi Arabia, and the United Arab Emirates – to support its latest International Monetary Fund (IMF) bailout program. This goes beyond a simple rollover of existing debts, offering a critical lifeline to the struggling South Asian nation.
Sri Lanka’s new leftist leader, Anura Kumara Dissanayake, faces a daunting task in navigating the country’s IMF bailout, which, despite providing a lifeline, has imposed unpopular austerity measures. While Dissanayake campaigned on promises to renegotiate the bailout and reverse austerity, experts suggest his options for significant changes are limited, with the IMF likely to hold firm on key elements of the agreement.
Pakistan is on the verge of receiving its 24th IMF bailout since 1958, with the IMF board set to discuss a $7 billion package on Wednesday. Finance Minister Muhammad Aurangzeb expresses optimism about the approval, highlighting recent economic improvements including lower inflation and increased investor confidence. The bailout is expected to provide Pakistan with much-needed financial support and boost its economic prospects.
Sri Lanka’s new leftist president, Anura Kumara Dissanayake, has pledged to renegotiate the country’s controversial $2.9 billion IMF bailout package. While affirming his commitment to the overall program, Dissanayake seeks adjustments to the austerity measures imposed, aiming to reduce taxes and boost economic recovery.
Pakistan’s economic crisis continues to worsen as the IMF delays approving a crucial $7 billion bailout package. The delay has sparked concern and frustration in Islamabad, with officials accusing the IMF of deliberate obstruction. This article explores the factors behind the delay, including Pakistan’s failure to secure debt relief and its continued subsidies, and examines the potential consequences for the country’s already struggling economy.
Fitch Ratings has upgraded Pakistan’s credit rating to CCC+ from CCC, citing reduced risks from external funding following the country’s securing of a new bailout package from the International Monetary Fund (IMF). The upgrade reflects greater certainty over continued external funding availability, particularly due to Pakistan’s staff-level agreement with the IMF for a new $7 billion Extended Fund Facility (EFF). The rating agency expects Pakistan to secure necessary funding assurances from key bilateral partners, including Saudi Arabia, the UAE, and China, to support the EFF.
Pakistan’s Finance Minister, Muhammad Aurangzeb, warns that the country will need more IMF bailouts if it doesn’t significantly increase tax revenue. The controversial budget, which aims to raise PKR 13 trillion by next July, has sparked backlash as it increases the tax burden on salaried workers while exempting income tax on property sales for bureaucrats and military personnel. The minister defends the budget, emphasizing the need to create a sustainable economy and attract foreign investment.
