Finance Adviser, Abdul Hafeez Sheikh announced on Saturday that Pakistan is about to secure 3.4 billion USD from Asian Development Bank (ADB) for the budgetary support. The obtained funds would be utilized to aid the balance of payments issue.
He announced the news via Twitter, stating “ADB to give $3.4 billion in #budgetary support. I had a meeting with Mr. Werner Liepach, DG ADB today to agree on the #ADB program. The ADB will provide $3.4 billion in budgetary support to help with #reforms and stabilization of the #economy”. He further explained that the funds would be released in two phases. In the first phase, 2.2 billion USD would be obtained in this financial year to strengthen the reserves and the external account. Apart from the expected 1 billion USD payment for project portfolio in the near future, the subject support would be an additional favor from the bank.
Pakistan has already made a loan agreement this year with the International Monetary Fund (IMF) for 6 billion USD for 3 three years to accommodate the deficits. Earlier, the reserves went below the 7 billion USD mark which raised the concerns sharply. Fortunately, due to the support of the UAE, Saudi Arabia, and China, the situation was controlled.
Recently, World Bank has also announced to support the tax reforms by funding 400 million USD to the Federal Government of Pakistan and 118 million USD for the Provincial Government of Khyber Pakhtunkhwa. However, the bank has imposed conditions for the payment, subject to the achievements of the desired targets.
In the latest budget, the federal government has approximated a growth of 2.4% for the next financial year, although it was officially forecasted at a rate of 4%. The target of 4% was approved by The National Economic Council in a high-level meeting, but later it was reduced to 2.4% in the budget presentation.