(MENAFN- Khaleej Times) Pakistan received a $6.
the international monetary fund said on 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 to 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 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 six to seven 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 muhammad ishaq dar said the country’s foreign exchange reserves had soared following the bailout package.
“i also have 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.
china growth view may be cut
meanwhile the imf which currently expects growth of 7.5 per cent this year in china may lower its forecast for the world’s second-largest economy according to changyong rhee director of the fund’s asia and pacific department.
first-quarter data indicated “maybe we have to revise this growth rate slightly down” rhee said at the peterson institute for international economics in washington.
“our forecast at this moment is 7.5 and the market trend at this moment is slightly lower than that” he later told reporters. “so we have to look at whether we have to do it or not.”
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