IMF completes 10th review under the extended fund facility for Pakistan
Pakistan's economy is gradually gaining strength and its short-term vulnerabilities are also receding, a senior official from the International Monetary Fund (IMF) has said. The deputy managing director of IMF, Mitsuhiro Furusawa, made the comment in a statement issued on Saturday after the fund's executive board approved the next tranche of $502 million for Pakistan.
Furusawa urged Islamabad to continue implementing economic reforms to strengthen these gains, Dawn online reported. "Building on these gains, further progress, including in the area of structural reforms, is needed to generate strong and inclusive growth and make the economy more resilient and competitive," he said. On Friday, the executive board announced the completion of the tenth review of Pakistan's economic performance under a three-year programme supported by an Extended Fund Facility arrangement.
The board also approved the country's request for modification of the endMarch 2016 performance criterion on the state bank's stock of net foreign currency swaps/forward position. The decision enables the immediate disbursement of about $502.6 million, bringing the total disbursements to Pakistan under this arrangement to $5.53 billion.
Meanwhile, The Executive Board of the International Monetary Fund (IMF) on March 25, 2016 completed the tenth review of Pakistan's economic performance under a three-year program supported by an Extended Fund Facility (EFF) arrangement. In completing the review, the Executive Board also approved the authorities' request for modification of the end-March 2016 performance criterion on the State Bank of Pakistan's stock of net foreign currency swaps/forward position. The Executive Board's decision enables the immediate disbursement of an amount equivalent to SDR 360 million (about US$502.6 mil- lion), bringing total disbursements SDR 3.96 billion (US$5.53 billion).
On September 4, 2013, the Executive Board approved the 36-month extended arrangement under the EFF in the amount of SDR 4.393 billion (US$6.64 billion at the time of approval of the arrangement) or 216 percent of Pakistan's current quota at the IMF. Following the Executive Board's discussion of Pakistan, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair issued the following statement: "Economic activity has continued to gradually gain strength, and short-term vulnerabilities have receded.
to Building on these gains, further progress, including in the area of structural reforms, is needed to generate strong and inclusive growth and make the economy more resilient and competitive.
"The authorities' continued commitment to reach the program's fiscal targets is welcome. Further widening the tax net and ensuring the fairness of the tax system, together with prudent management of budgetary spending and close coordination with the provinces, remain important to consolidate the gains in addressing Pakistan's fiscal vulnerabilities while generating the necessary resources for higher priority spending in areas such as infrastructure, health, and education.
"The monetary policy stance remains appropriate. Falling oil prices have helped efforts to bolster foreign reserves. While the establishment of an independent monetary policy committee has been an important step in advancing central bank autonomy, addressing remaining recommendations of the 2013 Safeguards Assessment will be key to strengthen it further. "Reinforcing financial sector resilience remains pertinent and efforts to enhance capital buffers of banks are encouraging. The recent amendments to the AML Act constitute a first step to widen the application of AML tools to the proceeds of tax crimes.