National News

ISLAMABAD, (APP):International Monetary Fund (IMF)
Executive Board has completed the eleventh review under the Extended
Fund Facility (EFF) for Pakistan, enabling the immediate
disbursement of an amount equivalent to SDR 360 million (about
US$501 million), bringing total disbursements to SDR 4.32 billion
(about US$6.01 billion).
According to a statement issued by the fund,the Executive
Board’s decision enabled the immediate disbursement of an amount
equivalent to SDR 360 million (about US$501 million), bringing total
disbursements to SDR 4.32 billion (about US$6.01 billion).
The Executive Board of the International Monetary Fund (IMF)
on June 27, 2016 completed the eleventh review of Pakistan’s
economic performance under a three-year programme supported by an
Extended Fund Facility (EFF) arrangement.
On September 4, 2013, the Executive Board approved the 36-
month extended arrangement under the EFF in the amount of SDR 4.393
billion (about US$6.64 billion at the time of approval of the
arrangement) or 216 percent of Pakistan’s current quota at the IMF.
Following the Executive Board’s discussion of Pakistan,
Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair on the
occasion stated that the economic recovery has gradually
strengthened and short-term vulnerabilities have further receded on
the back of improved macroeconomic stability and progress on
structural reforms.
“Preserving and consolidating macroeconomic stability and
further advances with key structural reforms, including beyond the
programme’s horizon, are needed to foster stronger and more inclusive
growth”, he remarked.
Mitsuhiro Furusawa said that the authorities are on track to
achieve their programme’s end-year fiscal targets, and their
commitment to continue with gradual fiscal consolidation in
FY2016/17 was welcome.
The amendments to the Fiscal Responsibility and Debt
Limitation Act, he said would strengthen the anchor for medium-term
fiscal policy, supporting fiscal sustainability and medium-term
macroeconomic stability.
Furthermore, he said that the new framework for Public-Private
Partnerships would foster much needed growth-supporting investments
and help manage associated fiscal risks.
“Sustaining progress with tax administration reforms, with a
view to widening the tax base, is needed to increase tax revenues
and create needed fiscal space for priority infrastructure and to
reinforce social expenditures”, he remarked.
He said that “Foreign exchange reserves have been
progressively rebuilt under the programme, and the continued
accumulation of international reserves would further bolster
external buffers and reduce vulnerabilities”.
Maintaining a prudent monetary policy stance, he said was
needed to preserve the achievements in containing inflation and to
support macroeconomic stability.
“Progress in strengthening the SBP’s autonomy is welcome, and
addressing the remaining recommendations of the 2013 IMF Safeguards
Assessment will be important to strengthen it further”, he remarked.
“Advancing financial sector reforms is important to reinforce
financial sector stability and development. Important steps include
moving ahead with establishing a deposit insurance scheme and
strengthening the regulatory and supervisory framework. The
expansion of the coverage of tax crimes under the AML framework is
welcome and will contribute to improve tax compliance and
governance”, he remarked.
Deputy Managing Director IMF said that “Continued progress
with structural reforms is needed to raise Pakistan’s growth
potential. Restructuring and privatizing loss-making public sector
enterprises (PSEs) remain a priority to ensure their financial
viability, reduce fiscal costs and strengthen the efficiency of the
economy”.
In light of the delays in the privatization agenda earlier in
the year, the authorities’ commitment to attract private sector
participation, while putting in place measures to reduce PSEs’
financial losses, was welcome, he remarked.
Furthermore, he said that efforts to complete the energy
sector reform should remain a priority.
The authorities’ decision to further contain the accumulation
of power sector arrears in the remainder of the programme is welcome,
as is their focus on further strengthening the performance of power
distribution companies and the updating of the power sector arrears
reduction plan.
He added that Pakistan’s commitment to move forward with the
implementation of the new business climate reform strategy would be
key to boost competitiveness and foster investment and private-
sector led growth.