Ailing Pakistan economy gets a Saudi boost

Pakistan's stock market jumped up nearly 3 percent on Wednesday, after months of freefall, following a government announcement that Saudi Arabia would provide billions of dollars to help the country overcome a deepening economic crisis.

The Islamic Kingdom would place 3 billion dollars with Pakistan's central bank for a year to help maintain depleting reserves at a safe level, the Foreign Ministry said overnight on Tuesday. Pakistan would also receive another 3 billion dollar provision as Riyadh had agreed to supply oil on deferred payments.

"The facility of oil on deferred payments would be for three years," the ministry said in a statement after Prime Minister Imran Khan's second visit to the Gulf state in less than two months.

The economy of the Muslim world's only nuclear power has been facing a double deficit as the gaps between exports and imports and spending and earning surged to threatening levels.

Pakistan's new government, which took over in August, had already requested a bailout package from the International Monetary Fund (IMF) and talks to finalise the terms and conditions are expected to take place next month.

The Saudi package would ease pressure on the economy and may help the government reduce the amount it is seekng from the IMF, former finance minister Shaukat Tareen said. The Saudi pledge has certainly sent a positive signal to the market, economist Muzammal Aslam said, pointing to 1,100-points rallying of a key index on the Pakistan Stock Exchange.    (dpa)