Pakistan and the IMF
IMF Completes Last Review Under Pakistan's Stand-By Arrangement, Approves US$135 Million Disbursement
The Executive Board of the International Monetary Fund (IMF) today completed the third and last review under Pakistan's Stand-By Arrangement, which was approved in November 2000 to support the country's economic reforms through September 2001 (see Press Release No. 00/64).
The completion of the final review will enable Pakistan to draw SDR 105 million (about US$135 million). This will bring total disbursements under the IMF-supported program to SDR 465 million (about US$600 million). To complete the review, the Executive Board approved a waiver for the non-observance of a performance criterion under the arrangement required due to a six-week delay in promulgation of a new income tax law.
After the Executive Board's discussion of Pakistan's economic program, Eduardo Aninat, Deputy Managing Director and Acting Chairman, issued the following statement:
"Pakistan's achievements under the program supported by the Stand-By Arrangement have been commendable. Despite adverse weather conditions, real per capita GDP rose, inflation has been lower than expected, and external balances and official reserves have improved in line with program targets. The implementation of structural reforms has been broadly on track. While tax revenue collection was weaker than expected, the budget deficit was kept within the targeted level.
"Another key challenge will be to further build foreign exchange reserves, which will require good coordination of monetary and exchange rate policies, while further liberalizing the foreign exchange interbank market to reduce the importance of the kerb market.
"Other reform priorities are to improve governance and transparency in the management of public resources, particularly in the context of the ongoing devolution of fiscal responsibilities to the newly elected local governments; the ongoing restructuring and privatization of public enterprises; and the strengthening of the financial system," Mr. Aninat said.
IMF EXTERNAL RELATIONS DEPARTMENT