Pakistan has secured a $6bn (£4.6bn) bailout from the International Monetary Fund (IMF) as the country’s economic crisis worsens.
The fund, which still needs approval from the IMF’s management, would be provided over a period of three years.
The agreement was secured after months of negotiations and is the latest in several bailouts from the IMF.
Pakistan has been experiencing an economic crisis with stagnating growth and a shortage of foreign currency reserves.
The IMF said in a statement that Pakistan faces a “challenging economic environment, with lacklustre growth, elevated inflation, high indebtedness, and a weak external position”.
It added that the funding programme would assist the Pakistani authorities’ strategy for a more consolidated growth by “improving the business environment, strengthening institutions, increasing transparency, and protecting social spending”.
IMF bailout funding is usually provided under very strict conditions, and many analysts have warned that any fresh IMF funds could harm Prime Minister Imran Khan’s pledges to build a “Madina” type welfare state.
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Since becoming prime minister in last August, Mr Khan has been actively seeking financial help from friendly Muslim majority nations in an attempt to decrease the amount of the IMF’s bailout.
Pakistan has also faced a potential balance of payments crisis – where a country struggles to keep up with external debts or pay for critical imports – due to a stagnating economy.
The IMF foresees Pakistan’s economic growth to slow down to 2.9% this fiscal year from 5.2% in 2018.
In February, the central bank had only $8bn (£6.2bn) left in foreign reserves.
