ISLAMABAD: The Asian Development Bank (ADB) on Friday approved one billion dollars budgetary support for Pakistan.

This will help the country further improve its financial and economic condition.

The approval of budgetary support is the outcome of the steps taken by the government for protection of disadvantaged segments of the society.

A press release issued by the ADB read the quick dispersing Special Policy-Based Loan is part of a comprehensive multidonor economic reform program led by the International Monetary Fund (IMF) to stabilize Pakistan’s economy after a major deterioration in its fiscal and financial position in mid-2018 caused growth to slump and threatened progress in alleviating poverty.

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“ADB’s financing was approved after the government implemented a series of IMF-supported reforms and actions to improve its current account deficit, strengthen its revenue base, and protect the poor against the social impact of the economic crisis,” it said.

ADB Director General for Central and West Asia Werner Liepach said the funds would meet the government’s emergency financing needs to prevent significant adverse social and economic impacts and lay the foundations for a return to balanced growth.

Pakistan is facing significant economic challenges on the back of a large balance of payments gap and critically low foreign exchange reserves together with weak and unbalanced growth. While the country’s economy has a history of boom and bust economic cycles, it reached a tipping point in 2018 after foreign investment shrank sharply in an uncertain political and global economic environment and the ongoing poor performance of state-owned enterprises caused public debt to reach unsustainable levels.

In July, the IMF approved a three-year $6 billion Extended Fund Facility (EFF) to finance the government’s economic reform program that aims to put Pakistan’s economy on the path of sustainable and inclusive growth. The EFF is expected to catalyze at least $38 billion in financing from Pakistan’s development partners.