Pakistan set to get $502 million from IMF

The approval of the disbursement of the next installment of the Extended Fund Facility was announced yesterday

Cash-strapped Pakistan is set to receive the 10th tranche of $502 million from the IMF next month under a bailout package arrangement, a media report said today.

The approval of the disbursement of next installment of the Extended Fund Facility was announced yesterday after a review of Pakistan's economic outlook, Dawn reported.

"The mission and Pakistani authorities have reached staff-level agreement on the completion of the ninth review under the Extended Fund Facility arrangement," IMF's mission chief to Pakistan Harald Finger said.

Finance Minister Ishaq Dar was present at the announcement.

About $502 million would be made available to Pakistan, Finger added.

He said Pakistan needed to work hard on four weak areas - taxation, energy sector reforms, restructuring and privatisation of public sector enterprises and improvement in investment climate.

Dar said the IMF executive board is expected to approve disbursement of next tranche of $502 million in its meeting on December 15.

He said the fund had revised its inflation forecast to 3.7% for the current year against its previous estimate of 4. 7% and kept economic growth rate projection at 4.5% but the government would get close to its target of 5.5% GDP growth rate.

The minister said Pakistan had met foreign exchange reserves target for end-September as they stood above $20.073 billion with minor subsequent movements.

Also, the government has met targets on net international reserves, including forward swaps and borrowing from the central bank.

Dar conceded that the government had missed revenue target by Rs 40 billion in the first quarter of the fiscal year and consequently the target for fiscal deficit.

He said the shortfall had been reduced to Rs 23 billion with expenditure management - the specifics of which he declined to divulge.

The IMF mission chief said economic activity continued to improve in Pakistan while challenges also remained.

"Real GDP is expected to grow by about 4.5%, helped by lower oil prices, planned improvements in energy supply and investment related to the China-Pakistan Economic Corridor.