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IMF to give $1.1 to Pakistan

Staff writer ▼ | November 10, 2014
The International Monetary Fund (IMF) is satisfied with the fiscal performance of Pakistan during the financial year ended on March 31 and its improving economic indicators.
Help   The International Monetary Fund is satisfied
After the December review, an additional IMF aid worth $1.1bn will be made available to the country. "Upon Board approval, SDR 720 million will be made available to Pakistan," the IMF said.

The Fund said economic indicators are improving in Pakistan. It projects a GDP growth of 4.3% for the current fiscal year, sees inflation on a downward trajectory, and expects credit to the private sector expanding at a robust pace.

"The external current account deficit was somewhat higher than expected over the past two quarters, with lower goods exports and higher imports partially compensated by strong remittances performance."

The IMF said the rapid build-up of gross reserves which rose from $5.4bn at the end of March to $9.1bn by the end of June 2014 stalled thereafter due to delays in divestment and sukuk transactions and the effects of political uncertainty on capital flows.

"However, going forward, reserves are expected to surpass three months of imports by the end of FY 2014/2015."

According to the IMF, Pakistan's reform programme remains broadly on track. The IMF said it was pleased that the government met the indicative targets on social transfers to the poor under the Benazir Income Support Programme (BISP). The government's efforts to expand support to the poor through BISP to 4.8 million eligible families by the end of this year, is a welcome step, it said.

The IMF said the State Bank of Pakistan (SBP) remains committed to a prudent monetary policy stance to assure attainment of its inflation and reserves accumulation objectives.

"In the energy sector, declining world oil prices and the expected start of imports of liquefied natural gas provide an opportunity to improve energy supply and continue tariff reforms while containing price increases to consumers."