WASHINGTON: The International Monetary Fund (IMF) on Friday disbursed $555.9 million to Pakistan, confirming the country was on track with the conditions of its IMF loan program.
The IMF saved Pakistan from possible default by agreeing last September to lend it $6.8 billion over three years. The cash is being doled out in increments and could stop if Pakistan fails to institute reforms, including cracking down on tax evasion and privatising loss-making state companies.
Pakistan's tax authorities in April said they would publicly shame defaulters by publishing taxpayers' details in a directory for the first time. Only around one in 200 citizens files income tax returns, leaving the state begging foreign donors to help fund crumbling schools and hospitals.
The IMF disburses loan tranches after confirming a country is on track with the conditions of any bailout.
Pakistan continues macroeconomic improvement: IMF
The IMF has said Pakistan's macroeconomic conditions are improving, as executive directors concluded a review of the country's economic performance.
On the occasion of the Executive Board's approval of the $555.9 million tranche for Pakistan, David Lipton, First Deputy Managing Director and Acting Chair, noted that “fiscal consolidation remains broadly on track.”
“Macroeconomic conditions are improving, but downside risks remain.”
The government has taken measures to address short-term macroeconomic vulnerabilities and advance structural reforms, including the energy sector reform, but continued efforts to safeguard the fragile economic recovery are needed,” he said according to a Fund statement.
He also acknowledged that Islamabad's efforts to boost foreign reserves are bearing fruit and should continue, including through spot purchases, greater exchange rate flexibility, and a prudent monetary policy.
In other areas, the Lipton noted the banking sector remains financially stable and profitable and also welcomed continued energy policy reforms.
