ISLAMABAD - The World Bank on Thursday approved one billion US dollars budgetary support for Pakistan . This support would be received by the next week, and with this its matching amount which is 100 billion in Pak rupee would be reduced from Pakistan’s domestic debt.
Through this budgetary support , the government of Pakistan would be saving 10 per cent in overall debt, as the current debt interest rate is 2.5 per cent whereas after receiving of this amount, it would be reduced to 2 per cent. Therefore, through this, a saving of 10 per cent in debt interest would be accrued.
On Thursday, the World Bank approved two development policy credits (DPCs) for Pakistan , one pertaining to energy and other to revenues. The World Bank board granted the approval with full consensus and there were no dissenting votes, says a statement issued by the government late night.
It is a purely concessionary loan, to be paid in 30 years, out of which 25 years is the normal period and five years is the grace period. The loan would become payable after 25 years.
The World Bank also approved a five-year country partnership strategy paper for Pakistan under which the country will get $11 billion from 2014-2019. Through this approval, four points of PML-N manifesto, Economy, Elimination of Extremism, Education and Energy have been endorsed by the World Bank as this grant would ensure implementation of this four point development agenda.
Finance Minister Ishaq Dar has congratulated the nation over this achievement as this would guarantee economic stability for the country and there would be a significant increase in the foreign reserves of the country.