IMF package to support economic reforms: Hafeez Shaikh

IMF package to support economic reforms: Hafeez Shaikh
Islamabad: Adviser to the Prime Minister on Finance Dr. Abdul Hafeez Shaik confirmed that the International Monetary Fund (IMF) has approved a $6 billion Extended Fund Facility (EEF) for Pakistan to support the incumbent government’s economic reforms.

In a tweet message, he said our program supports broad based growth by reducing imbalances in the economy.

He said a structural reform agenda which includes improving public finances and reducing public debt through revenue reforms is key part of the program. He expressed resolve for ensuring financial discipline and sound economic management.

IMF would deliver the amount in next three years where as Pakistan would receive $2 billion loan in current fiscal year.

With the IMF board s approval, the fund released $1 billion to Pakistan immediately and said in a statement the program aims to "support the authorities  economic reform program" and to help "reduce economic vulnerabilities and generate sustainable and balanced growth."

The fund will review Pakistan s performance quarterly over 39 months, phasing release of the additional aid over time.

The government agreed on the loan program last month and announced plans to slash civil expenditures and freeze military spending while promising to substantially raise revenues to stem a yawning fiscal deficit, and pledging to collect 5.5 trillion rupees ($36 billion) in taxes.

Discontent is simmering in the country following repeated devaluations of the rupee, soaring inflation, and increasing utility costs, while tax collection has been a long-standing challenge for authorities.

"Pakistan is facing a challenging economic environment, with lackluster growth, elevated inflation, high indebtedness and a weak external position," the result of a "legacy" of uneven policies, IMF mission chief Ernesto Ramirez Rigo said in a statement in June.

The agreement includes a primary budget deficit target of 0.6 percent of GDP excluding debt service costs.
The government, in its budget proposals for the next financial year, has added Rs357 billion loan from the IMF. An IMF team will visit Islamabad every three months to review the economic indicators of the country.

IMF and Pakistan s government had earlier already signed a staff agreement on May 12 in this regard.