WASHINGTON: The International Monetary Fund (IMF) tomorrow will hold its board meeting for considering an approval of the disbursement of second tranche of about $453 million to Pakistan under the $6 billion Extended Fund Facility (EFF) finalised in May this year. According to the IMF’s website, the board will review Pakistan’s economic growth.
On Nov. 8, the IMF stated that Pakistan’s fiscal deficits were narrowing, and announced it would release the second tranche of its $6 billion financial assistance program to the country.
“Completion of the review will enable disbursement of SDR 328 million (or around $450 million) and will help unlock significant funding from bilateral and multilateral partners,” Ramirez Rigo, head of an IMF mission to Islamabad, had said in a statement after the mission completed its first review of its program.
“The government policies have started to bear fruit, helping to reserve the buildup of vulnerabilities and restore economic stability. The external and fiscal deficits are narrowing, inflation is expected to decline and growth although slow, remains positive,” the IMF statement said.
The IMF had held meetings with Federal Bureau of Revenue (FBR) Chairman Shabbar Zaidi and Advisor to the Prime Minister on Finance Abdul Hafeez Sheikh.
Under the fund programme, the IMF mission had reviewed Pakistan’s performance against six performance criteria related to Net International Reserves (NIR), Net Domestic Assets (NDA), net foreign currency swap position, primary budget deficit target, net government borrowing from the central bank and stock of sovereign guarantees issued by the government.
In addition, there were two continuous performance criteria including zero new credit to the government by the SBP and on accumulation of external public payment arrears. On top of that, the authorities’ performance was also reviewed on five indicative targets including disbursements under BISP, government spending on health and education, tax collections, payment of tax refunds and a freeze on power sector’s circular debt.
The IMF said Pakistan’s near-term economic outlook was broadly unchanged from the time of the program approval in April, with gradually strengthening activity and average inflation expected to decelerate in the 2020 fiscal year. However, domestic and international risks remain, and structural economic challenges persist, it had stated.
“Positive for Pakistan! IMF Mission concludes successfully. IMF confirms that Pakistan met all First Quarter Performance Criteria by good margins and economy continuing to get better. Thank you PM and entire team!,” Dr Abdul Hafeez Shaikh, finance adviser to the prime minister had said in a tweet on the night of Nov. 8.
Pakistan has lifted interest rates over the past year to tame high inflation, which eased to 11.04% in October from 11.37% in September.
The IMF had disbursed in July this year about $991 million on completion of all prior actions committed by Pakistan before signing the fund programme.
