DUBAI: The International Monetary Fund has approved the third tranche of $545 million to Pakistan under the six-point $6 billion Extended Fund Facility.
This was stated by the head of IMF Mission Jeffery Franks while addressing a joint news conference after a meeting with Finance Minister Ishaq Dar in Dubai. Frank said both the parties have reached the loan agreement. He said Pakistan’s economy is moving towards the set objectives and economic growth has increased from 2.8 to 3.1 percent. Speaking on the occasion Finance Minister Ishaq Dar said our economy is on the right track and the government is taking a number of steps for further improvement.
He pledged to add 4500MW of electricity to the national grid in the next four years. “The government is providing electricity to industry despite its shortage and subsidy is also being given for the provision of cheap electricity to consumers,” the finance minister said. He said electricity distribution companies are being made efficient to overcome line losses, and added that the government has ended unannounced load shedding and approved an energy policy to increase its production. Ishaq Dar said the government is legislating to stop pilferage of electricity and gas.
The finance minister said the government is taking important steps for economic stability in the country. He said the government is ensuring smooth supply of electricity to the industry despite shortfalls. The government, he said, is giving subsidy on electricity and the tariff has not been increased for the consumers using up to two hundred units. Meanwhile, IMF Mission head Jeffrey Frank said Pakistan’s economic growth has increased from 2.8 percent to 3.1 percent, which is a good omen.
He said the IMF is not pressing Pakistan for privatisation but it is in the best interest of the country. Frank said economic indicators are heading towards their set targets. He said agreement with Pakistan for loan has been finalised. He noted that Pakistan’s foreign exchange reserves are getting stable, and increase in tax collection will reduce the country’s fiscal deficit.
The IMF has said that decisive efforts to broaden the tax net through the elimination of tax exemptions and loopholes granted through statutory regulatory orders (SROs) are critical to the future of Pakistan’s economy. The IMF mission said in a statement that it is encouraged by the overall progress made in pushing ahead with policies to strengthen macroeconomic stability and reviving economic growth. The mission reached staff-level understandings with the authorities on a set of economic policies detailed in an updated Letter of Intent, which will be subject to Executive Board approval.
IMF said that services and manufacturing are driving better-than-expected GDP growth, as reforms in the electricity sector seem to be bearing fruit with electricity shortages and unscheduled load-shedding declining. Led by large scale manufacturing and service sectors, growth is picking up and is now expected to reach about 3.1 percent for FY2013/14 as a whole, compared to the earlier estimate of 2.8 percent. Fiscal performance continued on track in the second quarter of 2013/14, with initial consolidation efforts relying on revenue mobilisation and reduction in energy subsidies.
IMF said that authority’s reform programme remains broadly on track, with the government meeting all of the quantitative performance criteria by end December 2013, with the exception of the targets on SBP’s net swap/forward positions and the ceiling on government borrowing from SBP.
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