The government on 12 May announced that Pakistan will receive the amount from the IMF over a period of three years.
Adviser to Prime Minister on Finance Abdul Hafeez Shaikh said the agreement will provide an opportunity to bring about structural reforms, improve its debt situation and send a positive signal to the world on foreign investment.
Pakistan's negotiations with the IMF have been ongoing since October 2018 but it is now that details of the bailout package have been finalised.
The IMF, in a press release, said it has reached a "staff-level accord" on economic policies but the agreement is subject to approval by its board of directors in Washington.
Pakistani stockbrokers look at share prices on a computer monitor during a trading session at the Pakistan Stock Exchange in Karachi, Pakistan, 08 May 2019. Source: AAP
Key challenge for prime minister
Implementing the deal and steering the economy towards stability remain key challenges for Prime Minister Imran Khan.
The deal comes almost nine months after the prime minister formed the government amid an already struggling economy.
Before becoming prime minister, Imran Khan in one of his speeches had dismissed the idea of an IMF package, saying "begging" from international institutions was worse than committing suicide. (See video )
Since coming to power in August 2018, he has met leaders and key officials of allies such as China, Saudi Arabia and the United Arab Emirates to secure short-term loans to deal with Pakistan's increasing current account deficit and fast-depleting foreign reserves.
But slow economic growth, soaring inflation and mounting debt have forced the government to turn to the IMF for a bailout that analysts say was inevitable.
Khan met IMF chief Christine Lagarde in February.
Source: BBC Monitoring
The ruling Pakistan Tehreek-i-Insaf (PTI) party on 12 May said it had agreed to receive what is described as its 13th bailout in the last three decades.
The country already owes 5.8bn dollars from previous bailouts, according to the IMF website.
Consequences for ordinary people
Strict conditions that come with the bailout package have led some local media outlets to describe it as the "most painful" programme for Pakistan.
"The backbreaking economic burden that the IMF has put on the millions will have consequences" liberal English-language daily Pakistan Today said in an editorial.
"As the IMF programme is implemented it is bound to put the common man under unprecedented economic pressures," the paper said on 13 May.
Experts suggest the bailout is likely to lead to increased taxes on fuel, higher power tariffs, a further devaluation of the rupee and interest rates amid already high inflation and rising unemployment.
A worker sorts potatoes at a market in Karachi, Pakistan, 13 May 2019. Source: AAP
"With additional taxes, everything will be more expensive and dollar rate will not be controlled and so prices of all import items will increase," renowned commentator Najam Sethi said on moderate Urdu TV Channel 24.
"No previous government had agreed on making such a huge increase in revenues," he added.
Former Finance Minister Hafeez Pasha on liberal Urdu TV channel Geo News said "a better deal" could have been reached and attributed the "harsh" agreement to the delay in approaching the IMF.
Strong opposition to the deal
Opposition parties have strongly criticised the deal, with one main party describing it as a "complete sell-out".
Maryam Nawaz, vice-president of the Pakistan Muslim League-Nawaz (PML-N) party, said the government had led Pakistan on the "brink of economic disaster" in just nine months.
Another opposition party member Sherry Rehman also criticised the deal, saying the government must brief the parliament over the conditions that have been agreed to.
"The journey from #TabdeeliSarkar ("government of change") to #GhulamiSarkar ("government of slavery") is now complete. Other governments ran IMF programmes but nothing like the creeping coup of the economy that's been happening since new government came in. We will hang ourselves but never go to the IMF ringing in all our ears," the Pakistan People's Party (PPP) member .
However, there are also those who are more optimistic about the deal.
"Compliance with the IMF terms may lay a solid ground for future investment and revival of the economy," moderate English daily The Express Tribune said in an editorial on 14 May.
Senator Nauman Wazir, a member of the ruling PTI party, on state-run PTV news said the agreement with the IMF was made after "detailed discussions" and that "new taxes will be introduced to recover the budget deficit".
Will it be effective?
The main question remains if Pakistan will be able to come out of its economic crisis after accepting the IMF terms and conditions.
For now, that's hard to say.
Local media suggest the real test of the government has just begun.
"Political support and ownership will be critical to successful implementation," leading English daily Dawn said.
"The politics of adjustment will now define the government’s course going forward, and transparency will be the critical ingredient for success here," it added on 14 May.
At the same time, there are doubts if the deal will remain in place.
"There is a likelihood of the programme to be suspended somewhere in the middle because of its hard terms and conditions," Pakistan Today added.
This article is republished from BBC Monitoring.
