The Executive Board of the International Monetary Fund (IMF) on September 28, 2016 completed the twelfth and final review of Pakistan’s three-year economic reform program supported by an Extended Fund Facility (EFF) arrangement. The Board’s decision enables the immediate disbursement of the final tranche in an amount equivalent to SDR 73 million (about US$102.1 million). On September 4, 2013, the Executive Board approved the 36-month extended arrangement under the EFF in the amount of SDR 4.393 billion (about US$6.15 billion, or 216 percent of Pakistan’s current quota at the IMF. (
Following the Executive Board’s discussion of Pakistan, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair issued the following statement:
“Pakistan’s Fund-supported program has helped the country restore macroeconomic stability, reduce vulnerabilities, and make progress in tackling key structural challenges. Economic growth has gradually increased and inflation has declined. External buffers have been bolstered, financial sector resilience has been reinforced, and the fiscal deficit has been reduced, while social safety nets have been strengthened. Tax policy and administration reforms allowed for further revenue mobilization. Steps have been taken to strengthen the State Bank of Pakistan’s autonomy. Energy sector reform allowed a reduction of power outages, energy subsidies, and accumulation of power sector arrears. A country-wide strategy to improve the business climate was adopted.
“Significant challenges remain for Pakistan in the post-program period, and the authorities’ commitment to continue implementing strong policies to reinforce macroeconomic stability gains and advance growth-supporting reforms is to be commended. In light of the significant public debt burden, the authorities’ plan to further reduce the fiscal deficit is welcome. The 2016/17 budget and the revised fiscal responsibility framework can anchor fiscal policy in support of further gradual fiscal consolidation. Further accumulating international reserves in a context of sufficient exchange rate flexibility will help strengthen confidence and competitiveness, while maintaining a prudent monetary policy stance will be key to supporting low inflation and macroeconomic stability. Swiftly addressing the remaining recommendations of the 2013 Safeguards Assessment is needed to further strengthen the central bank’s autonomy. Further progress in advancing financial sector reforms will be important.
“Moving forward with key structural reforms is pivotal to foster higher and more inclusive growth. Restructuring and attracting private sector participation in public enterprises is needed to ensure their financial viability and reduce fiscal costs. Completing the power sector reform will be important to strengthen the soundness of the sector and support growth. Continuing to move forward with the implementation of the new business climate reform strategy will help increase competitiveness, foster investment, and support private-sector-led growth and job creation.
“Close Fund engagement with Pakistan will continue through policy dialogue in the context of regular consultations and post-program monitoring, along with ongoing technical assistance.”