Officials say $510 million installment of three-year bailout package approved over improving economic performance.
The International Monetary Fund announced on Thursday that it would release to Pakistan a further installment worth $510 million of a three-year economic bailout package.
The IMF’s delegation head Harald Finger said in a statement that the decision was taken after a review of the country’s economic performance and “after productive discussions” with Pakistani authorities.
Finger said in a statement that growth remains robust and is expected to reach 4.5 percent this fiscal year despite a weak cotton harvest, declining exports, and a more challenging external environment. “Real GDP growth is expected to reach 4.5 percent in FY 2015/16 and 4.7 percent in FY 2016/17, helped by lower oil prices, rising investment, including related to the China Pakistan Economic Corridor (CPEC), improvements in energy supply, buoyant construction activity, and acceleration of credit growth,” the statement said.
The IMF also voiced satisfaction with Pakistan’s progress on reforms, which were required under a $6.6-billion bailout agreed in 2013.
The loan was granted on condition that Pakistan—which was suffering an energy crisis—carried out extensive economic reforms, particularly in the energy and taxation sectors.
IMF stated that all end-March 2016 quantitative performance criteria, including the budget deficit target and the floor for the central bank’s net international reserves, have been met. It said the IMF staff mission, led by Finger, met Pakistani officials in Dubai from May 2-11, 2016 to conduct discussions on the 11th review of Pakistan’s economic program.
Pakistan Finance Minister Ishaq Dar told reporters after the meeting with IMF officials that economic indicators have been positive and Pakistan has also succeeded in scaling down it’s fiscal deficit.