IMF, Pak­istan trust crosses 8th level

The Pak Banker - - FRONT PAGE - Javed Mah­mood

The In­ter­na­tional Mon­e­tary Fund mis­sion has once again shown con­fi­dence in the eco­nomic per­for­mance of Pak­istan dur­ing 8th eco­nomic per­for­mance re­view in Dubai.

At the con­clu­sion of re­view in Dubai last week, IMF mis­sion head Har­ald Fin­ger said that over­all the eco­nomic per­for­mance of Pak­istan was good and the econ­omy was mov­ing for­ward on growth and sta­bil­ity.

He said that a few tar­gets had been missed slightly, but over­all eco­nomic per­for­mance of the coun­try was sat­is­fac­tory.

The IMF staff mis­sion, led by Har­ald Fin­ger, held talks with Pak­istan's eco­nomic team led by the Fi­nance Min­is­ter Sen­a­tor Muham­mad Ishaq Dar in Dubai dur­ing July 29-Au­gust 7, 2015 to con­duct dis­cus­sions on the eighth re­view of Pak­istan's eco­nomic pro­gram sup­ported by a three­year IMF Ex­tended Fund Fa­cil­ity (EFF) ar­range­ment.

The all-is-well re­port of the IMF mis­sion about Pak­istan would lead to the dis-


path to­wards burse­ment of the next tranche of over $500 mil­lion shortly.

In last two fi­nan­cial years, 2013-14 and 2014-15, the IMF have al­ready pro­vided $4.4 bil­lion to Pak­istan un­der the Ex­tended Fund Fa­cil­ity ar­range­ment.

The IMF's loan fa­cil­ity has en­abled the gov­ern­ment to raise the for­eign ex­change re­serves to record high, above $18.5 bil­lion last month and in the days ahead the re­serves are set to cross $19 bil­lion mark af­ter the dis­burse­ment of next tranche by the fund.

IMF team leader Har­ald Fin­ger said: "We welcome the author­i­ties' com­mit­ment and progress in im­ple­ment­ing their eco- nomic pro­gram to im­prove eco­nomic re­silience, pro­mote eco­nomic growth and pri­vate sec­tor job cre­ation in Pak­istan. Af­ter pro­duc­tive dis­cus­sions, the mis­sion and the Pak­istani author­i­ties have reached staff-level agree­ment on the com­ple­tion of the eighth re­view un­der the EFF ar­range­ment. The agree­ment is sub­ject to ap­proval by the IMF Man­age­ment and the Ex­ec­u­tive Board. Upon com­ple­tion of this re­view, SDR 360 mil­lion (about US$502 mil­lion) will be made avail­able to Pak­istan.

"Pak­istan's econ­omy con­tin­ues to im­prove. Real GDP growth is ex­pected to in­crease to 4.5 per­cent this fis­cal year, helped by macroe­co­nomic sta­bil­ity, low oil prices, planned im­prove­ments in the do­mes­tic energy sup­ply, and in­vest­ment re­lated to the China-Pak­istan Eco­nomic Cor­ri­dor.

In­fla­tion dropped to 1.8 per­cent in July, but is ex­pected to in­crease in the com­ing months with the an­tic­i­pated sta­bi­liza­tion of com­mod­ity prices. De­spite de­clin­ing ex­ports, the ex­ter­nal cur­rent ac­count deficit nar­rowed to 0.8 per­cent of GDP in FY 2014/15 ow­ing to fa­vor­able oil prices and strong growth of re­mit­tances. For­eign ex­change re­serves of the SBP con­tin­ued to in­crease at a healthy pace, and reached US$13.5 bil­lion at end-June 2015, cov­er­ing three months of im­ports.

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