Accord reached with IMF for release of $500m tranche

Source:  AFP Published in Business & Economy on Friday, August 7, 2015

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have successfully completed negotiations on the Eighth Review under the 3-year Extended Fund Facility (EFF) programme according to a press conference held today by Federal Finance Minister Ishaq Dar.

The minister of finance and IMF’s Mission Chief, Harald Finger, have completed negotiations for the release of the ninth tranche estimated at $500 million under the current EFF programme which amounts to $ 6.2 billion.

“Completion of the Eighth Review is indicative of the government’s commitment in implementing structural reforms in areas of taxation, energy, monetary and financial sectors and public sector enterprises,” said Dar.

“We achieved real GDP growth rate of 4.24 per cent in fiscal year 2014-2015 (FY14-15), which is the highest in the last seven years. IMF has projected a growth rate of 4.5 per cent in fiscal year 2015-2016 (FY15-16), however the government will retain its goal of achieving growth of 5.5 per cent during the current fiscal year,” added Dar.

The finance minister also added that the current macroeconomic situation has improved and will improve further with the completion of China-Pakistan Economic Corridor (CPEC).

Ishaq Dar also said on the occasion that rate of inflation has fallen considerably during the current fiscal year as compared to the same period last year, and robust growth in workers’ remittances and low oil prices have continued to help contain the current account deficit.

Speaking in regards to foreign exchange reserves, the minister added that the current reserves with State Bank of Pakistan stand at $ 13.8 billion, while sceduled banks hold $ 5 billion as of July 31.

“Fiscal deficit has been brought down to 5.3 per cent in the last fiscal year and this year we have a target of 4.3 per cent. We are also committed to reduce public debt, and lay the foundations for a more sustained growth,” stated the finance minister.

Responding to a question, the finance minister said that the government has replaced National Tax Number (NTN) with Computerised National Identitiy Cards (CNIC) in order to expand upon the existing tax base targetting individuals as of July this year.

“Adminstrative reforms in the Federal Beureau of Revenue (FBR) are gradually taking hold, along with reforms with in the energy sector which will improve the energy situation in the Pakistan,”

Earlier in May, the government reached an agreement with the IMF for the disbursement of a tranche of $506 million.

People Mentioned
  • Muhammad Ishaq Dar Federal Minister for Finance, Revenue, Economic Affairs and Statistics