The International Monetary Fund (IMF) has agreed to pay Pakistan a $500m tranche of a bailout package that was suspended a year ago due to Islamabad’s failure to implement reforms.

Pakistan secured a $6bn bailout package in 2019 to avert a balance of payment crisis, but the loan was suspended after the payment of only two tranches.

The IMF, however, cited a lack of progress on a package of economic reforms attached to the loan, which included raising energy prices and boosting revenue collection, considered one of the lowest in the world.

The international financial institution announced it would pay the latest tranche after the success of negotiations between the two sides late Tuesday night.

“This is a good development for Pakistan,” Finance Minister Hafeez Shaikh said in a statement.

The IMF had asked Pakistan to give up central bank control of the currency and to adopt a market-based exchange rate, privatize loss-making public sector companies and end subsidies in power and agriculture sectors.

Some of the reforms were implemented since the deal was signed, but privatization and ending subsidies remained elusive due to political pressure.

The economy of the Muslim nation with a population of 220 million has slid deeper into crisis since Prime Minister Imran Khan took over in 2018.

Burgeoning fiscal, current account deficits and a dip in revenues from tax collection are at the heart of the crisis.