Today, the Islamic Corporation for the Development of Trade (ICDT) signed a financing agreement worth $600 million with Pakistan, aiming to enhance relations and support infrastructure development and sustainable growth.
The institution, a member of the Islamic Development Bank Group, stated that the agreement reflects its commitment to supporting Pakistan’s energy and agriculture sectors, paving the way for sustainable economic growth, according to the Saudi Press Agency.
It is worth noting that the Islamic Development Bank Group allocated $5.4 billion for 77 projects spread across 24 member countries, as announced by its president, Mohammed Al-Jasser, to “East Economy.”
In January 2023, the Islamic Development Bank pledged $4.2 billion to Pakistan over three years to assist the country in financing its reconstruction plan after devastating floods engulfed a third of the country in the summer, as revealed by Pakistan’s Information Minister, Marriyum Aurangzeb, at the time.
Pakistan is facing challenging economic conditions, reflected in the depreciation of its local currency and the depletion of its foreign exchange reserves.
This has led to heavy reliance on International Monetary Fund (IMF) support, with Pakistan receiving 23 rescue packages from the IMF since its independence in 1947, making it one of the largest recipients of IMF aid in the world.
The country faces demands to repay $22 billion in external debts in the fiscal year starting in July, nearly three times its foreign exchange reserves. Meanwhile, it grapples with the highest inflation levels in Asia, currently exceeding 20%.
Last month, Pakistan obtained preliminary approval from the IMF for a final tranche worth $1.1 billion from a $3 billion loan program.
Pakistan is also taking steps to attract investments and sell assets, including Pakistan International Airlines, a state-owned carrier that has not turned a profit in nearly two decades.
The government aims to sign a share purchase agreement for a stake ranging from 51% to 100% by June, according to a document published on the Privatization Commission’s website, the agency responsible for asset sales.
