Pakistan Seeks $1.1 Billion From IMF, May Get with Riders on Lowering Deficit

Pakistan will more likely receive a loan instalment 1.1 billion dollars from the International Monetary Fund (IMF) next month as the latter is satisfied with its economic performance, government officials said here Saturday.

According to Pakistan finance ministry, this will enable the IMF to go to their Board for the release of fifth tranche of about 1.1 billion dollars, possibly before Dec 15.

The Pakistani delegation led by Finance Minister Ishaq Dar met IMF team, led by Jeffrey Franks, Chief of IMF Mission, spanning almost 11 days on the Fourth Review as well as the Fifth Review of Pakistan’s 6.64 billion dollars three-year Extended Fund Facility (EFF) programme in Dubai, Xinhua reported.

Franks in his statement on the occasion said that the IMF mission held “productive discussions” with Pakistani government officials on Pakistan’s economic performance under the EFF programme and “is encouraged by the overall progress in strengthening macroeconomic stability and output growth”.

Franks said the mission reached understandings with the authorities on a Memorandum of Economic and Financial Policies which, upon management’s approval, would be considered by the IMF Executive Board in December to conclude the fourth and fifth reviews.

Upon approval, about 1.1 billion dollars would be made available to Pakistan.

Franks said the mission was encouraged by Pakistan’s strong fiscal performance achieved during fiscal year 2013/2014, and by the authorities’ determination to further lower the deficit to 4.7 percent of GDP in the current fiscal year.

“The mission reaffirms the IMF’s support to the government’s efforts to implement their economic reform efforts in improving the business climate,” Franks remarked.

Here are some riders in the medium-term:

• Raising growth gradually to near 5 percent by 2015/16 as macroeconomic stability is entrenched and structural reforms are pursued.

• Bringing inflation down to 6-7 percent range by 2015/16, from the current level of 8.3 percent.

• Increasing central bank reserves to over 3 ½ months of imports by 2015/16.

• Reducing the fiscal deficit to 3 ½ percent of GDP by 2015/16 from an estimated 8.0 percent in 2012/13, with provincial governments contributing their fair share of the fiscal consolidation process.

• Liberalizing the trade regime and reforming public sector enterprises through restructuring and/or privatization.

• Improving the business climate.

• Strengthening the tax system.

• Protecting the most vulnerable from the direct and indirect impacts of reform measures.


(With inputs from IANS)

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