Islamabad, February 4

The International Monetary Fund (IMF) announced today it would release the latest instalment worth $497 million of a three-year economic bailout package to Pakistan, while urging Islamabad to implement planned energy sector reforms and restructure loss-making public companies.

The IMF’s delegation head Harald Finger said in a statement that the decision was taken after a review of Pakistan’s economic performance from January 26 to February 4, and that the money would be transferred after approval by the board.

Finger said that the real GDP growth rate was expected to reach 4.5 per cent for the 2015-16 financial year due to lower oil prices, planned improvements in the energy supply, investment related to the China Pakistan Economic Corridor (CPEC), buoyant construction activity, and acceleration of credit growth.

“Economic activity remains robust. Although a weak cotton harvest, declining exports, and a more challenging external environment are weighing on growth prospects,” he said.

“While many structural benchmarks have been met, measures pertaining to the energy sector reform and restructuring of loss-making public enterprises are yet to be implemented,” he added.

The $6.6-billion bailout agreed in 2013 was granted on condition that Pakistan — which was suffering an energy crisis — carry out restructuring in the energy and taxation sectors.

Addressing a press conference with Finger in Dubai, Finance Minister Ishaq Dar said that his government had successfully reduced fiscal deficit and brought down inflation.

“For first six months of the year, inflation is down to 2.1 per cent,” Dar said, referring to the period from July 2015 to January 2016, the start of financial year.

Dar said that the target for budget deficit was 4.3 per cent this year.