{
  "title": "IMF Survey : Pakistan Gets $6.6 Billion Loan from IMF",
  "publication": "IMF News, September 4, 2013",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/socar090413a",
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  "summary": "The IMF's Executive Board has approved today a $6.6 billion loan for Pakistan to support its program to stabilize the economy and boost growth while expanding its social safety net to protect the poor.",
  "publishDate": "2013-09-04",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The IMF's Executive Board approved a $6.6 billion loan to Pakistan to support a program to stabilize the economy, boost growth, and expand the social safety net.\n- Program duration: 36-month program under the IMF’s Extended Fund Facility.\n- Rationale: Falling Central Bank foreign exchange reserves, widening fiscal deficit, relatively high inflation, structural impediments to growth, and limited access to international financial markets."
    },
    {
      "heading": "Program objectives and scope",
      "content": "- Macroeconomic stabilization: bring down inflation, reduce the fiscal deficit, and reverse balance of payments pressures.\n- Structural reforms: address bottlenecks in the energy sector, reform trade policy, the financial sector, and improve the business climate.\n- Social protection: expand targeted income support and introduce a school-attendance conditional income support component for poor families.\n- Complementary financing: World Bank, Asian Development Bank, and other partners offered significant financial support for adjustment and reform policies."
    },
    {
      "heading": "Financing instrument and timeline",
      "content": "- Instrument: Extended Fund Facility (established in 1974 for countries with weak balance of payments and chronic structural impediments).\n- Extended Fund Facility features: longer programs and longer maturities than Stand-By Arrangements—between 4½–10 years.\n- Pakistan’s program duration: three years (36 months), allowing time to implement reforms; extended repayment period to ease future repayment."
    },
    {
      "heading": "Key quantitative targets and indicators",
      "content": "- Loan amount: $6.6 billion.\n- Current account deficit: around 1 percent of GDP.\n- Foreign exchange reserves: falling to less than 1½ months of imports.\n- Fiscal deficit path:\n  - Nearly 8.5 percent of GDP last year.\n  - Target: 5.8 percent of GDP in 2013/2014.\n  - Target: 3.5 percent of GDP by the end of the program.\n- Growth trajectory:\n  - Recent average growth: 3 percent.\n  - Anticipated growth by end of program: vicinity of 5 percent.\n- Program length: 36-month program."
    },
    {
      "heading": "Policy measures and mechanisms",
      "content": "- Fiscal measures:\n  - Substantially reduce tax loopholes and exemptions.\n  - Broaden the tax base and reduce tax evasion.\n  - Tightening on the fiscal and monetary sides to put the fiscal position on a sustainable path and reduce inflation.\n- Energy sector reforms:\n  - Comprehensive energy policy addressing supply, distribution, regulation, and pricing.\n  - Reduce energy subsidies that currently go mainly to the rich; maintain subsidies for the poorest consumers.\n  - Aim to encourage efficient consumption, more reliable and consistent energy delivery, and substantially reduce blackouts over the program duration.\n- Structural reforms:\n  - Trade policy reform.\n  - Financial sector reform to improve credit availability for private businesses.\n  - Improve business climate and privatize some state-owned enterprises to increase economic efficiency.\n- Social protection:\n  - Significant boost of targeted income support programs: increase number of families covered and increase benefit amounts.\n  - New conditional income support component for poor families tied to school attendance."
    },
    {
      "heading": "Expected economic effects and mechanisms for job creation",
      "content": "- Short-term: growth may slip in the first year due to fiscal adjustment and time lags for structural reforms.\n- Medium-term: restoring macroeconomic stability and addressing bottlenecks expected to accelerate growth toward the vicinity of 5 percent by the end of the program.\n- Job creation channels:\n  - Reduced fiscal deficit freeing up credit for private sector borrowing and investment.\n  - Enhanced business environment and financial sector reforms attracting recovery of foreign direct investment.\n  - Structural reforms and privatization increasing economic efficiency and growth potential.\n\nSource: IMF Survey, September 4, 2013.\n\n---\n\n Content in this bundle\n\n- 012813 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Country Focus\n- Press release\n- Extended Fund Facility\n- Middle East growth moderates\n- Resident Representative\n- Pakistan and the IMF\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/socar090413a"
    }
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    "Published: September 4, 2013",
    "The IMF's Executive Board approved a $6.6 billion loan to Pakistan to support a program to stabilize the economy, boost growth, and expand the social safety net.",
    "Program duration: 36-month program under the IMF’s Extended Fund Facility.",
    "Rationale: Falling Central Bank foreign exchange reserves, widening fiscal deficit, relatively high inflation, structural impediments to growth, and limited access to international financial markets.",
    "Macroeconomic stabilization: bring down inflation, reduce the fiscal deficit, and reverse balance of payments pressures.",
    "Structural reforms: address bottlenecks in the energy sector, reform trade policy, the financial sector, and improve the business climate.",
    "Social protection: expand targeted income support and introduce a school-attendance conditional income support component for poor families.",
    "Complementary financing: World Bank, Asian Development Bank, and other partners offered significant financial support for adjustment and reform policies.",
    "Instrument: Extended Fund Facility (established in 1974 for countries with weak balance of payments and chronic structural impediments).",
    "Extended Fund Facility features: longer programs and longer maturities than Stand-By Arrangements—between 4½–10 years.",
    "Pakistan’s program duration: three years (36 months), allowing time to implement reforms; extended repayment period to ease future repayment.",
    "Loan amount: $6.6 billion.",
    "Current account deficit: around 1 percent of GDP.",
    "Foreign exchange reserves: falling to less than 1½ months of imports.",
    "Fiscal deficit path:",
    "Growth trajectory:",
    "Program length: 36-month program.",
    "Fiscal measures:",
    "Energy sector reforms:",
    "Structural reforms:",
    "Social protection:",
    "Short-term: growth may slip in the first year due to fiscal adjustment and time lags for structural reforms.",
    "Medium-term: restoring macroeconomic stability and addressing bottlenecks expected to accelerate growth toward the vicinity of 5 percent by the end of the program.",
    "Job creation channels:",
    "[012813 (PDF)](/external/np/pp/eng/2013/012813.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Country Focus](https://www.imf.org/en/news/country-focus)",
    "[Press release](http://www.imf.org/external/np/sec/pr/2013/pr13322.htm)",
    "[Extended Fund Facility](http://www.imf.org/external/np/exr/facts/eff.htm)",
    "[Middle East growth moderates](http://www.imf.org/external/pubs/ft/survey/so/2013/car052113a.htm)",
    "[Resident Representative](http://www.imf.org/external/country/PAK/rr/index.htm)",
    "[Pakistan and the IMF](http://www.imf.org/external/country/PAK/index.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
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