The International Monetary Fund (IMF) has given Pakistan a $6 billion, three-year loan requested by Prime Minister Imran Khan's government to help resuscitate the country's ailing economy.
With the IMF board's approval, the fund on July 3 released a $1 billion tranche immediately to Pakistan, saying in a statement that the program aims to "support the authorities' economic reform program" and to help "reduce economic vulnerabilities and generate sustainable and balanced growth."
The fund will review Pakistan's performance on a quarterly basis, phasing release of the additional aid over the next 39 months.
The loan will contribute to "reducing imbalances in the economy" while protecting those most vulnerable, Pakistan's finance minister, Abdul Hafeez Shaikh, said on Twitter.
"IMF Board approved a $6 billion Extended Fund Facility (EFF) for Pakistan to support our economic reform program. Our program supports broad based growth by reducing imbalances in the economy. Social spending has been strengthened to completely protect vulnerable segments," Shaikh tweeted.
Islamabad last month agreed on the loan conditions and announced plans to reduce civil expenditures and freeze military spending.
The government also pledged to substantially raise revenues to stop a yawning fiscal deficit and said it was aiming to collect $36 billion in taxes. Tax collection has long been a challenge for Pakistan's fiscal authorities.
Discontent is simmering in the country following repeated devaluations of the national currency -- the rupee -- soaring inflation, and increasing utility prices.
"Pakistan is facing a challenging economic environment, with lackluster growth, elevated inflation, high indebtedness, and a weak external position," the result of a "legacy" of uneven policies, IMF mission chief Ernesto Ramirez Rigo said in a statement in June.
An IMF mission led by Rigo had visited Islamabad from April 29 to May 11 to discuss a bailout package.
This is Pakistan's 13th IMF program, and it includes a primary budget deficit target of 0.6 percent of gross domestic product (GDP) -- excluding debt service costs.
With reporting by AP, AFP, and dawn.com