ISLAMABAD: The World Bank has assured Pakistan of providing $1.5 billion assistance during the current fiscal year to support its economic development and stabilisation programme.

A statement issued by the ministry of finance quoted Mr. Philippe Le Houerou, the World Bank’s vice president as appreciating and sharing diagnosis of Pakistan’s economy as well as direction set by the new government and to take the World Bank’s relationship with Pakistan to the next level after a successful conclusion of a programme with the International Monetary Fund (IMF).

Mr Houerou is currently leading a bank delegation to Pakistan and had a detailed session with Finance Minister Ishaq Dar on Wednesday.

In view of economic policies and stabilisation measures taken by the present government, the World Bank was now ready to work out $1.5 billion programme for the present fiscal year to support government’s economic policies, he said.

On Diamer-Bhasha Dam, “the World Bank Vice President said that Asian Development Bank is carrying out due diligence of the project and once that is completed, we will start working on it,” said the official statement.

He said there was a great interest of foreign investors in Pakistan, especially in the energy sector.

The minister informed the delegation that the government had increased the Public Sector Development Programme, enhanced the social safety net budget and aimed to bring macroeconomic stability.

At the same time, the government would ensure transparency, financial discipline and good governance.

He welcomed a timely visit of the World Bank delegation, saying the country was going through a very delicate economic phase unprecedented in its history where it was confronted with the twin menace of budget and current account deficit.

Giving an overview of the economic situation inherited by the government, Mr Dar said the public debt, which was Rs3 trillion in 1999, increased to over Rs14tr in June this year and hence the government prepared an economic road-map keeping in view the ground realities with doable targets.

Senator Ishaq Dar said that “we had to clean up past acts which were long overdue. In this connection, the circular debt was cleared and power tariffs were rationalised to check its reemergence.

The government also announced along with the budget a three-year macro economic stability framework which aims at increasing the tax-to-GDP ratio to 13 per cent, bring down fiscal deficit to 4pc and public debt from 63.5pc to 57.5pc, and increase investment to GDP ratio from 14 to 20pc by the end of third fiscal year.

He told the delegation that the approval, in principle, had been given for trading of T-bills and Pakistan’s Investor Bonds in stock exchanges. Besides, the KSE has been asked to protect the interests of small investors whenever a major correction takes place.