ISLAMABAD: The International Monetary Fund (IMF) approved the $502 million tranche for Pakistan after the latest review of a bailout package awarded in 2013.

According to a statement issued by the finance ministry on Friday, the IMF's board meeting was held in Washington which considered the 10th review report of the Extended Fund Facility (EFF) support programme and accordingly approved the next tranche of $502 million for Pakistan.

It is pertinent to mention that the talks between Pakistan and IMF for the 10th review were held in the first week of February.

The tranche comes as "economic activity remains robust," the IMF said, welcoming what it termed the government's "strong performance" in the second quarter of fiscal year 2015-16.

"A weak cotton harvest, declining exports and a more challenging external environment" pose a threat to growth prospects, the IMF had said, while real Gross Domestic Product (GDP) growth is expected to reach 4.5 per cent in FY15-16.

Lower oil prices, planned improvements in power supply and investment in relation to the China-Pakistan Economic Corridor, construction and acceleration of credit growth are seen as the main drivers behind the forecasted growth.

The main priority, the IMF said, is further consolidation gains and strengthening of the long-term resilience of the economy.

Once the latest disbursement is made, the IMF will still have to release $1.1 billion of the total $6.7bn loan agreed three years ago.

Finance Minister Ishaq Dar has welcomed the approval accorded by the IMF.

He said the process of economic reforms undertaken by the incumbent government led the country to a stage where it has achieved macro-economic stability and is now well set on the path to economic growth.