ISLAMABAD: Pakistan will get about $502 million from the IMF by the end of this month as the Fund’s executive board is scheduled to meet in Washington on Monday (Sept 28) for the eighth review.

The approval of the fresh tranche by the board would be merely a formality since the staff mission which held talks with a Pakistani team led by Finance Minister Ishaq Dar in Dubai last month, has already declared that the country’s economy continues to improve. The board acts on report by the staff mission.

Take a look: Accord reached with IMF for release of $500m tranche

Both IMF and the Asian Development Bank (ADB) have observed that the real GDP growth is expected to increase to 4.5 per cent during 2015-16, helped by macroeconomic stability, low oil prices, planned improvements in the domestic energy supply and investment related to China-Pakistan Economic Corridor.

While IMF says that despite declining exports, the external current account deficit narrowed to 0.8pc of GDP in 2014-15 owing to favourable oil prices and strong growth of remittances, ADB in its latest report says that the exports are expected to increase only slightly after two years of stagnation, as manufacturing continues to suffer under energy shortages and low cotton prices may see a modest increase.

The budget continues to rely on domestic sources for deficit financing, supplemented by external financing and higher privatisation proceeds equal to 0.2pc of GDP, it says.

The ADB report says notable risks to the budget estimates include failure to achieve a significantly higher provincial fiscal surplus and the Federal Board of Revenue collecting less tax than projected. So far, the provincial fiscal surplus has remained below budget estimates, contributing to higher deficits.

Published in Dawn, September 25th, 2015

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