File photo: Pakistan Prime Minister Imran Khan. Photograph:( AFP )
The development comes even as Islamabad faces blacklisting by Financial Action Task Force (FATF) due to its inaction on the financing of terror.
International Monetary Fund agreed to a $6 billion bailout for Pakistan's beleaguered economy with a caveat that the government act on terror funding and other key areas.
The IMF statement confirming the bailout said, "Priority areas include improving the management of public enterprises, strengthening institutions and governance, continuing anti-money laundering and combating the financing of terrorism efforts"
The development comes even as Islamabad faces blacklisting by Financial Action Task Force (FATF) due to its inaction on the financing of terror. The country was greylisted last year by the Paris based body.
An IMF mission was in Islamabad from April 29 to May 11 to discuss the bailout package or Extended Fund Facility (EFF) with the Imran Khan government and request it to cut subsidies and introduce several reforms.
"The EFF aims to support the authorities’ ambitious macroeconomic and structural reform agenda during the next three years. This includes improving public finances and reducing public debt through tax policy and administrative reforms to strengthen revenue mobilization and ensure a more equal and transparent distribution of the tax burden", IMF in a statement added.
The bailout will also see an increase in electricity prices in Pakistan although the government has assured it will not impact the common man.
The staff-level agreement will now have to be approved by IMF management and Executive Board. This is the 13th bailout the south Asian country has received since the 1980s. The last time Pakistan government got a bailout package from the IMF was in 2013.