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Pakistan's IMF deal offers economic pain relief but no panacea

Political instability threatens to derail efforts to regain confidence of key lenders

A trader counts U.S. dollars at a currency exchange in Peshawar: Pakistan will need $41 billion over the next 12 months, its finance minister has said.   © Reuters

ISLAMABAD -- Pakistan stepped away from the brink of bankruptcy by striking a deal with the International Monetary Fund to resume a $6 billion loan program this month. But experts warn that there is much more work to do, and that political instability poses a major obstacle to a true economic revival.

Islamabad on July 14 reached a staff-level agreement with the IMF to restart their stalled Extended Fund Facility. Pakistan will get a first tranche of $1.17 billion from the IMF in the coming weeks, which could pave the way for securing further loans from other lenders.

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