December 19, 2003	Friday	Shawwal 24, 1424

ISLAMABAD, Dec 18: An International Monetary Fund team led by Milan Zavadjil, Division Chief in the Middle East and Central Asia Department, on Wednesday completed a staff visit as part of an ongoing dialogue with the authorities on Pakistan‘s economic reform programme.

In a statement issued here, the IMF resident representative officer in Pakistan said the Fund supported the programme with a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF) that was approved on December 6, 2001.

The combined sixth and seventh quarterly reviews were completed on October 27, 2003. Reviews are henceforth semi-annual with the next executive board meeting on Pakistan expected after a mission visits Pakistan in March 2004. Two-thirds of the total amount of SDR 1.034 billion (about $1.4 billion) under the PRGF loan has been disbursed.

The mission team confirmed the favourable macro-economic outlook. Key financial and economic indicators under the programme as of end-September 2003 remain on track. The 5.3 per cent economic growth target for the current fiscal year will likely be achieved. The overall fiscal deficit during July-September was consistent with the quarterly target and the Central Board of Revenue receipts exceeded expectation.

Poverty reducing expenditure registered a welcome acceleration. The staff team concurred with the authorities on the need to watch price developments carefully over the coming weeks to safeguard the gains achieved in restoring financial stability.

While the financial results of KESC and Wapda benefited from favourable weather conditions during July-September, the underlying performance of these public electricity companies for improved efficiency and subsequent privatization and to finalize a transparent regulatory framework that will guide the sector.

Board-based reforms remain crucial for higher economic growth. The completion of the privatization programme for state commercial banks and increased market orientation of the National Savings Scheme (NSS) will help foster financial intermediation. Sustained efforts at better public service delivery and improved governance in a range of areas, including by implementing the reform programme for the CBR, remain important.

The staff team looks forward to the publication of the authorities’ Poverty Reduction Strategy Paper (PRSP) and the opportunity it offers for broader consensus building.