ISLAMABAD, Aug 29: The Asian Development Bank (ADB) has agreed to release the first tranche of a programme loan worth $500 million to Pakistan for accelerating economic transformation that enables the government to regroup recent economic initiatives.

“Progress is made in talks with the ADB delegation led by its Director General Juan Miranda on the proposed programme loan during the last couple of days,” a senior official in the finance ministry told Dawn on Friday.

The ADB has shown willingness to release a new programme loan of $1.3 billion to Pakistan in the current fiscal year to help the new government in improving the economic indicators.

According to the official, the government has not yet decided to negotiate any new project loan with the World Bank. However, the bank will provide loan for the projects already committed.

The official said that after meetings with the senior officials of the World Bank led by its Vice-President for South Asian Region Ms Isabel M. Guerrero, new projects will be identified for seeking loan from the Bank in future.

“We will discuss this issue with the stakeholders,” added the official.

Answering a question, the official ruled out the possibility of entering into a new arrangement with the IMF. “We are not considering any programme with the IMF,” the official categorically clarified.

An official announcement said that Finance Minister Naveed Qamar briefed the ADB delegation led by Director General ADB Juan Miranda on overall macro economic policy environment.

Mr Qamar informed that ministry of finance and the State Bank of Pakistan were working in tandem to initiate and implement all difficult and urgently needed measures to attain targeted economic and fiscal goals. Expenditure controls and rationalisation of monetary spending in public sector is underway, the minister said.

The ADB team apprised the finance minister that they were working with all stakeholders to support the diverse financial requirements of the government.

Both sides discussed ADB’s phased assistance. Both sides also discussed Pakistan’s commitments to structure reforms, which would contribute to economic revival in the country.

The ADB was briefed on strong measure to cut down on expenditure side, broaden revenue base, enhance tax-to-GDP ratio, enhance forex reserves, reduction in domestic borrowing, and prudent budgeting of public sector development programme.

Meanwhile, the finance minister also briefed Ms. Isabel about the series of measures taken by the government to stabilise the economy.

He reiterated the present government’s commitment to stabilise the economy at the earliest and reaffirmed willingness to take additional measures.

He informed her that after the election of the president, the country will come back to a stable political environment which is essential for achieving the economic objectives of the government.

The vice president of the World Bank was of the view that the directions of the policy measures are right but more concerted efforts are required to achieve macroeconomic stability.

The World Bank is also willing to assist Pakistan from the experiences of Latin American countries in devising targeted social safety mechanism which will be beneficial for the Benazir Income Support Programme, Ms Isabel said.