$502m IMF tranche gets board’s nod, Dar ecstatic

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  • No bankruptcy fears for Pakistan, says IMF official

The International Monetary Fund (IMF) Board meeting held in Washington on Friday considered the 10th Review report of the EFF-supported program and accordingly approved the next tranche of $502 million for Pakistan.

The Pak-IMF talks for the 10th Review were held at Dubai in the first week of February.

Finance Minister Senator Ishaq Dar welcomed the approval accorded by the IMF Board.

He said the process of economic reforms undertaken by the present government under the leadership of Prime Minister Nawaz sharif had led the country to a stage where it had achieved macro-economic stability and was now well set on the path to economic growth.

The finance minister expressed hope that Pakistan would complete all the reviews under the IMF extended fund facility.

NO RISK OF BANKRUPTCY:

Meanwhile a senior IMF official has said that Pakistan is not on the verge of bankruptcy, in fact it is steadily improving.

Addressing a seminar ‘State of the economy and way forward’, held at the University of Karachi’s by the Applied Economics Research Centre the other day, International Monetary Fund’s (IMF) Resident Mission Chief Dr Tokhir Mirzoev said that Pakistan exports constituted just nine percent of the GDP, however, the rate of inflation and the national budget deficit had also declined, which is a positive sign for the economy.

Dismissing popular notions, Dr Tokhir Mirzoev said that despite fall in exports, the country’s economy is stable on the back of low oil prices and strong performance by remittances.

“Pakistan’s current economic growth rate is 4.6 percent, while India leads the region with 7.5 percent. Bangladesh, however, interestingly has a better growth rate, of 6.8 percent, from that of China’s which stands at 6.3 percent,” Dr Mirzoev said as he compared the country’s economic performance with the economy of other regional players.

Talking about the tax revenue collection, he said that the tax collection has improved by 11 percent. However, it should be raised by at least 20 percent.

“The IMF programme in Pakistan started in 2013 to pull the country out of the financial crisis through $6.7 billion, out of which $5.2 billion have been disbursed to this date. The programme envisages structural reform priorities for the energy sector, tax to GDP ratio, privatisation of public sector enterprises, and lastly for improving the business environment,” Mirzoev explained.

Talking about the country’s debt management the IMF official said, “Pakistan’s foreign debt was around 64 percent of its total GDP, which is not a very concerning ratio, as other states usually have higher debt ratios.”

“However, Pakistan has to take advantage of this significant opportunity of low oil prices by reforming the energy sector.” The IMF official also said that the IMF did impose conditions on Pakistan, which included removal of subsidies in the public sector.