Finance Minister Senator Ishaq Dar on Thursday at a press conference along with IMF Mission Chief Jeffrey Franks said Pakistan and the IMF had successfully completed the negotiations on the sixth review under the 3-year Extended Fund Facility (EFF) programme for an amount of $6.64 billion. This will enable the IMF to go to their board for the release of seventh tranche of about $518 million, he announced.
The minister said that completion of the sixth review was indicative of the government’s commitment in implementing structural reforms in the areas of taxation, energy, monetary and financial sectors and public sector enterprises. “Economic activities continue to improve. We are expecting better growth from agriculture sector, particularly from wheat and cotton crops despite the floods this year,” the minister added.
The minister highlighted areas on which the IMF mission was briefed during the course of almost seven days talks. He said stable growth in workers’ remittances and low oil prices helped to contain the current account deficit in the balance of payments. Successful issuance of international Sukuk and multilateral inflows enabled the foreign exchange reserves of SBP and scheduled banks crossed the US $15 billion mark on December 31, 2014. Similarly, the CPI inflation continued its declining trend and was clocked in at 3.9 percent year on year in January 2015. The average CPI for July-January stood at 5.77% compared to 8.8% for the same period last year.
Performance of the banking sector remained robust as earnings surged, asset quality improved and solvency strengthened. The minister affirmed that the budget for FY 2014-15, consistent with the programme objective, was approved. “We are well underway to achieve the fiscal deficit target. In the First Half of FY 2014-15, we over-performed on the fiscal targets agreed with the IMF,” he remarked.
The minister said: “We have successfully completed the negotiations of the sixth review. This has been a team effort. Our challenges remain numerous but we are determined that we will remain on track in achieving the objectives of the programme inline with PML’s (N) 2013 election manifesto.” The minister complemented Jeffrey Franks, the mission chief of IMF, and his team for an outstanding job they had done in conducting the sixth quarterly review.
Jeffrey Franks lauded performance of the government in achieving various benchmarks and economic targets. He said there was overall improvement in Pakistan’s economy but emphasised that efforts should be made towards building up forex reserves. He also called for more efforts aimed at autonomy of the State Bank.