Two loans totalling $1.3 billion will be provided by the Manila-based bank to support “the Pakistan government’s emergency needs to prevent significant adverse social and economic impacts.”
“ADB is committed to providing wide-ranging support to strengthen Pakistan’s economy and reduce the risk of external economic shocks,” the bank's Director General for Central and West Asia Werner Liepach said in the communique.
Another policy-based loan of $300 million was approved to help Pakistan to help build energy infrastructure.
The proposal for financing was approved after the Islamabad government implemented a series of reforms which have been noticed by global rating agency Moody’s Investor Service earlier this month.
The agency upgraded the credit outlook of Pakistan to stable from negative which provided confidence to the ailing economy, which is struggling to improve its current account deficit and strengthen its revenue base. The agency believes that the balance of payments dynamics will continue to improve.
According to Abdul Hafeez Shaikh, financial adviser to Prime Minister Imran Khan, foreign direct investment surged 200 percent in the first half of 2019. In the first four months of the year, while the current account deficit fell by 73.5 % compared to the same period last year.