IMF negotiated with EFF programme worth $6.2 billion for Pakistan
08 August, 2015
ISLAMABAD: Pakistan and International Monetary Fund (IMF) have successfully completed negotiations on the Eighth Review under the three-year Extended Fund Facility (EFF) programme worth $6.2 billion that would lead to the release of ninth tranche of $502 million.
Addressing a press conference in Dubai on Friday, Finance Minister Ishaq Dar said that completion of the eight review is indicative of the government’s commitment to implementing structural reforms in areas of taxation, energy, monetary and financial sectors and public sector enterprises. According to a press release issued by the Finance Ministry, the minister gave an overview of national economy and noted that due to declining oil prices in international markets and decrease of commodities’ prices in market, the current-account position has improved and reduced burden of $2.6 billion that also put a positive impact in over all economy.
The minister said that the country’s forex reserves were also recorded at highest level in its economic history and have crossed $18 billion mark. The increasing reserves had enabled the country to re-qualify for the concessionary fund facility of $2 billion from International Bank for Reconstruction and Development (IBRD), he remarked while adding that revenue collection recorded a 15 percent growth during fiscal year 2014-15 as compared to same period of last year, whereas real GDP growth rate was recorded at 4.24 percent in FY 2014-15, which was the highest in last seven years.
Dar said IMF had projected a growth rate of 4.5 percent in FY 2015-16. However, the government retains its goal of achieving growth of 5.5 percent growth this fiscal year. The macroeconomic situation continues to improve and China-Pakistan Economic Corridor project (CPEC) would further play a significant role in economic activity, he remarked. Dar said inflation is still on a downward trajectory, as the headline inflation (CPI) fell from 8.6 percent in FY 2013-14 to 4.5 percent in FY 2014-15. In July 2015 CPI fell to a 12-year low of 1.8 percent as compared to 7.9 percent of the corresponding month of last year.
About the balance of payment, the minister said that robust growth in workers’ remittances and low oil prices continued to help contain the current account deficit. Foreign exchange reserves of the State Bank of Pakistan stood at $13.8 billion and that of scheduled banks at $5 billion as of July 31, he added. The performance of the banking sector remained robust on the back of 52 percent surge in earnings and strong solvency as reflected in Capital Adequacy Ratio (CAR) of 17.2 percent, the finance minister added.