The International Monetary Fund has approved the immediate release of $502.6 million tranche of a loan to Pakistan, praising the country’s commitment to the financial targets as agreed with the fund
A meeting of the IMF Executive Board held on March 25 approved the release of the instalment after the completion of the 10th review of the economic performance under three-year program supported by an Extended Fund Facility (EFF).
In competing the review the the Executive Board also approved the authorities’ request for modification of the end-March 2016 performance criterion on the State Bank of Pakistan’s stock of net foreign currency swaps/forward position.
The IMF approved the $6.6 billion loan to Pakistan in 2013 to help the country stave off an imminent default on its external payments. The program helped the South Asia’s second-biggest economy to stabilize and get back to the upward growth trajectory which had remained 3 percent on average between 2008 and 2013.
With the release of the latest tranche, the total disbursement under the program has reached $5.53 billion.
“Economic activity has continued to gradually gain strength, and short-term vulnerabilities have receded,” Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair said in a statement issued after the Board’s meeting.
“Building on these gains, further progress, including in the area of structural reforms, is needed to generate strong and inclusive growth and make the economy more resilient and competitive,” he added.
The IMF director also praised the government for continued commitment to reach the program’s fiscal targets is welcome.
“Further widening the tax net and ensuring the fairness of the tax system, together with prudent management of budgetary spending and close coordination with the provinces, remain important to consolidate the gains in addressing Pakistan’s fiscal vulnerabilities while generating the necessary resources for higher priority spending in areas such as infrastructure, health, and education.”