ISLAMABAD: Pakistan and International Monetary Fund (IMF) have successfully completed negotiations on the Eleventh Review under three year Extended Fund Facility (EFF) programme for an amount of $6.4 billion. Pakistan will get eleventh tranche of $500 million which will be released in June after the approval of IMF Board.
“Completion of the Eleventh Review is indicative of government’s strong commitment in implementing difficult structural reforms in areas of taxation, energy, monetary and financial sectors and public sector enterprises”, Finance Minister Ishaq Dar said.
Finance Minister while talking to media at Dubai along with IMF Mission Chief Herald Finger said that overall performance on the Eleventh Review has been highly satisfactory. “We met all of the end-March 2016 Quantitative Performance Criteria-SBP’s Net Domestic Assets, Net International Reserves, Foreign currency swap/forward position by significant margins”, he added.
He further said that FBR not only achieved its third quarter target of Rs. 715 billion but exceeded it. “This indeed is a remarkable achievement as for the first time after several years, no downward revision has been made in FBR targets and we are on course to achieving the originally fixed targets. Meanwhile growth rate for the current year is expected to be around 5 percent as it being a massive damage to cotton crop. For the next fiscal year, growth is projected at over 6 percent in our macroeconomic framework”, Dar said.
On Energy Sector reforms Finance Minister was of the view that energy sector reforms is on priority agenda of the government and government is committed to add over 10,000 MW of electricity to the system by March 2018. “We have added imported Liquefied Natural Gas (LNG) to the system, which has improved energy supply in the country, especially to the industrial sector, as the import of LNG has doubled to 400 mmcfd”, he maintained.
Dar opined that the LSM growth is the highest in the last 8 years. Major sectors like Automobiles registered growth at 28 percent followed by Fertilizers 16 percent, Rubber products 11.6 percent, Leather products 11.5 percent, and Chemicals 11.2 percent. Cement dispatches witnessed uptick by over 19 percent and there has been a continued credit expansion. The CPEC will also play a significant role in further boosting economic activities, he added.
He further stated that the Pakistan Stock Exchange (PSX) has scaled new height of 36,265 index on 10th May, 2016 crossing the highest index achieved previously in August, 2015 indicating robust economic activity and reflecting investor confidence.
“We are continuing with the financial sector reforms agenda for strengthening the legal, regulatory and supervisory framework aimed at safeguarding stability of the financial sector”, talking on financial sector reforms agenda Dar said, adding the budget deficit which stood at over 8 percent of GDP in FY 2013 was brought down to 5.3 percent in FY 2015 and is targeted for 4.3 percent in current FY 2016.
“We are also committed to reduce public debt, and lay the foundations for a more sustained growth. Despite the fact that the government is reducing its fiscal deficit, allocation for Public Sector Development Program (PSDP) has doubled and social safety net expenditures have increased by 267 percent through three budgets of the current government. The ratio of FBR taxes to GDP is projected to increase to 10.2 percent in the current fiscal year”, the finance Minister said.
On Social Protection, Ishaq Dar said that Government is committed to support the poor and the most vulnerable segments of population through BISP. With significant expansion in allocation of BISP cash transfers, which has been enhanced from Rs.40 billion in FY 2013 to Rs.107 billion in FY 2016; increasing the coverage from 3.7 million to 5.3 million families; and extensively enhanced income support annual stipend from Rs.12000 to Rs.18800 during this period, he concluded.
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