Pakistan faces tough challenge to build on new bailout

Significance

The IMF reached a staff-level agreement on the deal with the authorities in July. In April, Pakistan received the final tranche of a nine-month, roughly USD3bn Stand-By Arrangement (SBA) loan from the IMF that helped avert the risk of a sovereign debt default.

Impacts

• Pakistan will likely find it difficult to avoid a delay in the disbursement of bailout funds during at least some of the programme reviews.
• The China-Pakistan Economic Corridor will continue to be a key focus of the Islamabad-Beijing partnership.
• Failure to ease economic hardship among the population would prompt an increase in anti-government sentiment.