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IMF says Pakistan economy on track but inflation looms

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File photo shows Pakistan Finance Minister Ishaq Dar and Jeffrey Franks, the chief for the IMF Pakistan mission.— File Photo by INP
File photo shows Pakistan Finance Minister Ishaq Dar and Jeffrey Franks, the chief for the IMF Pakistan mission.— File Photo by INP

ISLAMABAD: The International Monetary Fund said Saturday that Pakistan's economic reform programme remained broadly on track, but warned over rising inflation.

Pakistan received a $6.7 billion IMF bailout package last year to help the country achieve economic reforms, particularly in its troubled energy sector.

“The IMF is encouraged by the overall progress made in pushing ahead with policies to strengthen macroeconomic stability and reviving investment and growth,” Jeffrey Franks, the fund's mission chief for Pakistan, said in a statement in Islamabad.

The IMF's Pakistan staff mission visited Dubai from May 1-9 to conduct discussions on the third review of the bailout package, which was approved by the fund's executive board last September.

The mission met senior officials from the finance ministry and the State Bank of Pakistan (SBP), weeks ahead of a scheduled $550 million fourth loan tranche that Pakistan is set to receive.

“Economic indicators are generally improving, with growth gaining momentum, external finance improving, and credit to the private sector rising,” Franks said, but added that core and headline inflation were also rising.

The inflation rate currently stands at 9.2 per cent but the IMF wants Pakistan to “target an additional reduction in inflation towards their medium-term goal of 6-7 per cent in the next fiscal year”, which starts on July 1.

“Led by large-scale manufacturing and service sectors, GDP will expand by about 3.3 per cent in financial year 2013-14, accelerating further to reach four percent next year,” he said.

The mission also noted an improvement in the balance of payments situation and efforts being made by Pakistan to build up SBP reserves and stabilise sentiment in the foreign exchange market.

“The authorities' reform program remains broadly on track,” Franks said, describing as “strong” the fiscal performance of the government during the first nine months of the current financial year 2013-14.

At a joint press conference with Franks on Saturday, Pakistan's Finance Minister Ishaq Dar said the country's foreign exchange reserves had soared following the bailout package.

“I also have a good news to share – the country's foreign exchange reserves have jumped to $12.9 billion,” he said, adding they will rise to $15 billion by the end of September.

The reserves stood at $7.8 billion before the bailout last year.

A report on the third review has been tentatively scheduled for consideration by the IMF Executive Board in late June, Franks said.

If approved, it would make about $550 million available to Pakistan, he added.


Comments (9) Closed



Mustafa May 10, 2014 10:04pm

On track to where IMF wants us to go, it has been on that track for six years, the track tuns from Larkana to Raiwind.

Harmony May 10, 2014 10:17pm

Rampant inflation hurts the poor most. And no progress in tax evasion.

Naheem May 10, 2014 11:05pm

I dont seem to understand how did it get to $15 billion dollars after the $12.9 Billion loan.

before $7.8 Billion after 12.9 Billion Loan we end up with $15 Billion, something is wrong here

Where is $5.7 Billion missing...........

Byjan May 10, 2014 11:49pm

Yes it IS on track - track of collapse, chosen for it by the IMF.

farooq May 11, 2014 12:37am

They are ( Ministry Of Finance) are begging around the entire world to bring back huge loans which the two generations will not able to pay off. These huge amounts are being squandered over least required mega projects to receive big kick backs in Cayman Islands dummy banks owned by them..Enough is enough and the corrupt elite should tried and imprisoned for life after making recoveries.

Nighat Mobin May 11, 2014 01:15am

Economy will improve if qualified and competent finance minister and not relatives and friends of Nawaz Sharif are appointed on important positions. Looks like the cabinet is composed of relatives and friends of the PM who are not qulified. How will the economy improve if the Ministers don't pay taxes or pay minimal tax. Look at their life style and see how much tax they pay?

Mohammed May 11, 2014 03:31am

Thank you Mr Dae you and IMF make me lough. Mr Nawaz sent this man home or he along with IMF will get you going.

R May 11, 2014 11:47am

@Naheem

$ 12.9 billion is the what the reserves currently amount to. $ 15 billion will be the amount by end September 2014. and $7.8 billion is the amount in reserves last year before we were granted the loan from IMF, which you have correctly understood. :)

khanm May 12, 2014 05:18pm

IMF says Pakistan economy on track but inflation looms... what an ambiguous statement. Inflation is the one form of taxation that can be imposed without legislation.i think someone should teach basic principle of economics to MR DAR..Domestic inflation reflects domestic monetary policy..