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| February 15, 2002 | Friday | Zilhaj 2, 1422 |
Decision on second tranche next month: Poverty Reduction Growth Facility
ISLAMABAD, Feb 14: The IMF Board may meet in late March or early April to approve the second tranche of $110 million out of $1.3 billion Poverty Reduction Growth Facility (PRGF) for Pakistan.
This is stated in an announcement issued by the local International Monetary Fund (IMF) office here on Thursday.
It also says that on the basis of Pakistan’s prudent economic management, the mission will ask IMF Managing Director Horst Kohler to recommend that the executive board may complete the review.
If the economic review is approved by the board, about $110 million will be available to Pakistan under the PRGF.
The announcement also says the mission team commended the authorities for their prudent conduct of macro-economic policy after the events of Sep 11, 2001, and hailed the steadfast implementation of the structural reform agenda, particularly in the area of tax administration and fiscal transparency.
It observed this policy stance has contributed to a strengthening of the international value of the rupee, continued low inflation, and a strong build-up of international reserves. Higher foreign investment inflows and a strong stock market point to the increased investors’ confidence in Pakistan’s economic outlook.
However, reflecting a decline in the demand for Pakistan’s exports mostly due to regional security concerns, a slowdown in manufacturing growth, combined with somewhat reduced prospects for agricultural production due to continued drought, has resulted in a downward revision of projected economic growth to about 3.3 percent for fiscal year 2001/02.
The mission agreed with the authorities that the unlikely sharp fall in imports during July-Dec 2001, and lower growth and inflation required a downward revision in the CBR revenue target for the current fiscal.
On the positive side, lower interest payments on the public debt, increased aid receipts, and revenue reforms and additional measure during Jan-June 2002 will offset part of the revenue shortfalls and some unforeseen additional expenditures.
The mission stressed the paramount importance of implement