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Saturday, November 09, 2013
Pak-IMF conclude review for release of $547 millionISLAMABAD: Minister for Finance Senator Muhammad Ishaq Dar said Friday that Pakistan and International Monetary Fund (IMF) had successfully concluded the first review for release of second tranche of US $ 547 million to Pakistan under three years Extended Fund Facility (EFF) out of a total amount of $ 6.6 billion.
“This will enable IMF to go to their board for the release of second Tranche of US $ 547 million in December for approval”, he said while addressing a press conference at Ministry of Finance this evening.
Head of IMF Mission Jaffrey Frank, Advisor Finance Ministry Rana Asad Amin, Secretary Finance Dr Waqar Masood Khan and Governor State Bank of Pakistan Yasin Anwar were also present on the occasion.
The minister said that the visiting IMF review mission has appreciated the economic policies of the government’s first quarter and its performance which has fulfilled the commitments made with the Fund. “I am pleased to announce that Pakistan and IMF have successfully concluded the first review under the 3-year EFF programme for an amount of $6.6 billion. This will enable IMF to go to their Board for the release of second tranche of about $547 million”, he said.
He said this is indicative of government’s seriousness in implementing the home-grown macro economic stability programme. Senator Dar said that higher growth has been registered compared to initial estimate under the programme and the manufacturing growth, spurred by better energy supplies, was behind this development. He said that government has paid Rs 480 billion circular debt and remaining Rs 80 billion has also been cleared. He said due to this initiative, 1700 MW of electricity have been added in the system. The minister said that government has not increased the tariff of the lowest income group specially the poor segment of the society and paid Rs. 250 billion as subsidy for the relief of this income group.
Dar said that the targets for budget deficit and projected revenues of FBR, have performed better than expected in the programme.
He said that the budget deficit was only 1.1% of GDP as against the target of 1.7% and FBR revenues were Rs.469 billion against Rs.436 billion projected in the budget. The FBR, he said, is on track on the issuance of notices to the potential tax-payers and broadening tax and improvements in tax administration.
The finance minister said that the current account deficit for first quarter was higher than the target reflecting strong aggregate demand as reflected in higher growth projection going forward.
Regarding Privatisation, the minister said it was the PML-N government which had started the process of privatisation and “We are progressing towards the privatisation, restructuring and strategic partnerships of PSEs.
He said financial institutions, privatised by the PML-N, were performing well and contributing billions of rupees in terms of taxes to the national exchequer.
“On the same time we are also taking steps for the protection of the rights of the workers whose entities would be privatised”, he added. He said during next three to four years about 22000 MW electricity would be produced in this regard while under medium term plan 40,000 MW low cost electricity would be produced. The minister said other multilateral donors would provide US $ 1.7 billion out of which US $ 700 million would be allocated for 4500 MW Dasu project in KPK and the work on the project would start soon. Apart from it the government has decided to start work on Diamer-Basha dam from its own resources.
The IMF mission leader Jeffrey Franks in his statement said that the IMF mission held constructive discussions wit government and central bank officials on the economic performance under the EFF programme and is encouraged by the overall progress made thus far.
The mission, he said reached staff-level understandings with the authorities on a set of economic policies detailed in an updated Letter of Intent.
“Discussions focused on the main issues ahead, and the policies needed to build macroeconomic stability as the basis for shoring up confidence and boosting economic growth. While economic conditions remain challenging with pressure on balance of payments, growth prospects are somewhat better than previously envisaged. The programme , he said remains broadly on track, with the government meeting all of the quantitative performance criteria by end September 2013, with the exception of the target on Net International Reserves (NIR), which underperformed due to lower than expected external flows including foreign investment and other official assistance, coupled with interventions by the SBP to ease pressure on the Rupee.
The mission, he said was encouraged by the government’s efforts to enhance tax revenues, which slightly exceeded the programme target level.
The mission, he said also recognized the authorities’s tax administration reform measures and expects these to gradually deliver further improvement in revenue collections. Furthermore the government is on track to present a plan by end-December 2013 to broaden the tax net through the elimination of most tax exemptions and loopholes granted through Statutory Regulatory Orders (SROs).
The government has already approved a National Energy Policy to comprehensively address energy problems through demand and supply management and to bring improvement in governance and transparency. app
Courtesy www.dailytimes.com.pk