ADB assures Pakistan of USD 2 billion in annual loans amid economic crisis
- In Reports
- 01:59 PM, Sep 17, 2024
- Myind Staff
The Asian Development Bank (ADB) has assured Pakistan of USD 2 billion in annual loans to support the cash-strapped nation, according to a media report on Tuesday. The assurance was provided by ADB President Masatsugu Asakawa during a meeting with Pakistani officials on Monday, The Express Tribune reported, citing sources from the Ministry of Economic Affairs.
The ADB will provide USD 2 billion per year from 2024 to 2027, totalling USD 8 billion over four years. Of this amount, USD 1 billion will be offered at a concessional fixed interest rate of 2 percent. The rest will be at higher rates due to Pakistan’s current financial difficulties.
Despite reaching an agreement with the International Monetary Fund (IMF), Pakistan has faced challenges in securing affordable loans. Interest rates on recent deals have ranged between 7 and 11 percent, reflecting global lenders' concerns about the country's creditworthiness. Three major international credit rating agencies have downgraded Pakistan to below investment grade, making it more difficult to access cheaper credit from international markets.
A press release from the Ministry of Economic Affairs stated that President Asakawa assured Pakistan of ADB's ongoing support, particularly in public-private partnerships and enhancing resilience to climate and natural disasters.
During his visit, Asakawa met with Economic Affairs Minister Ahad Cheema to discuss Pakistan's development priorities and the tough macroeconomic reforms being implemented by the government. He praised Pakistan’s stabilisation measures aimed at achieving economic recovery.
The ADB president also inaugurated the foundation of a new resident mission building in Pakistan. He noted that this coincided with consultations on the ADB's new Country Partnership Strategy for Pakistan for 2026-2030. The new strategy will focus on identifying Pakistan's key development challenges, promoting structural reforms, and enhancing economic and climate resilience. The ADB will also explore using digital technology to drive inclusive growth and improve government services.
Asakawa further emphasised ADB's commitment to regional economic integration, particularly through the Central Asia Regional Economic Cooperation (CAREC) program, which aims to unlock new trade and investment opportunities by strengthening regional linkages.
In his meeting with Prime Minister Shehbaz Sharif, Asakawa was assured that the government is committed to overseeing reforms to ensure their long-term impact.
Additionally, the ADB has appointed Emma Fan, a Chinese-born New Zealander, as its new country director for Pakistan. She will replace the current director, Yong Ye, next month. The IMF has also appointed a new country head, Mahir Bicini, a Turkish national, who will assume his role in December.
Pakistan has been a founding member of the ADB since 1966.
Image source: adda247.com
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