IMF mission chief Jeffrey Franks addressing a press conference along with Finance Minister Ishaq Dar (unseen) in Islamabad on Friday. PHOTO: APP
The Washington-based lender agreed the three-year programme with Islamabad in September and made an initial payment of $540 million.
The package is aimed at reducing Pakistan's fiscal deficit - which neared nine per cent of gross domestic product last year - and reforming the energy sector to help resolve severe power cuts that have sapped growth potential.
Future payments are dependent on the completion of tough economic reforms measured at quarterly reviews.
An IMF team visited Pakistan from October 28 to November 8 for talks with top finance ministry and State Bank of Pakistan (SBP) officials.
Mission chief Jeffrey Franks said the programme was "broadly on track", with all major benchmarks hit apart from foreign exchange reserves, which he said was missed in part due to SBP interventions to prop up the falling rupee.
"Challenges on the balance of payments will persist for some time to come, so it is crucial that firm action be taken to begin to rebuild foreign exchange reserves," Franks said in a statement.
The nuclear-armed state, battling a homegrown insurgency, is blighted by a dysfunctional energy sector, with severe power shortages have limited GDP growth.
But there was brighter news for Pakistan on GDP as the IMF revised their growth forecast upwards slightly from 2.5 per cent to 2.75 per cent. Earlier in the week, Pakistan also got a boost when a motion to block its duty free access to European markets was shot down.
Franks and his team will submit a report on Pakistan's progress to the IMF board for review in late December, and if approved the lender will release the next tranche of $550 million.
He said that despite the challenges facing Pakistan, predictions of imminent financial collapse - the "sky is falling mentality", as he put it - were perhaps excessive.
"When growth is going to be positive, inflation is relatively modest compared to many other countries that have been in crisis over the years and a budget deficit that is coming down decisively, we shouldn't exaggerate the problem," he told reporters.
COMMENTS (9)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
they will just beg from US..what else...!!
IMF is kind of too itchy and wants everything fixed in one day.They should be worrying more about Eros where trillions of dollars are going down the drain.
@Dhaka: instead of thinking about imf you should worry about those children who born in boat live there and die
IMF funded money to develop nuke weapon and now warns what a stupid IMF.
The ruling elite including Sharif Bros and their relatives pay no taxes. Until all the rich are taxed, the country will continue to beg.
“When growth is going to be positive, inflation is relatively modest compared to many other countries that have been in crisis over the years and a budget deficit that is coming down decisively, we shouldn’t exaggerate the problem,”
Budget deficit is not coming down! I suppose these things have to be said for public consumption.
Don't understand why the imf is soo stupid to give loan to pakistan ?
Easiest method to save foreign currency is to cut spending - few less nuke missile tests maybe in order.
Tax Revenues are not coming in as projected Foreign exchange reserves are going down There is a slowdown in economy and business sentiments are negative. Law and order situation is not improving The challenges are very significant to turn around the country