IMF to provide $510 million aid tranche to Pakistan

DUBAI: The International Monetary Fund has reviewed Pakistan’s economic performance and will make available a further $510 million to the country as part of a three-year, $6.7 billion financial assistance programme, the IMF said on Thursday.

The money will be provided when the review is approved by the IMF’s management and executive board, the Fund said in a statement, describing its discussions with Pakistan as “productive” and adding that performance criteria in the programme had been met.

Pakistan’s gross domestic product is projected to grow 4.5 percent in the 2015/16 fiscal year ending this June, and 4.7 percent in the following year, the IMF said.

“Growth remains robust despite a weak cotton harvest and declining exports amid a more challenging global environment,” it said, citing benign oil prices, rising investment including projects linked to trade with China, improvements in energy supply, strong construction activity and faster credit growth.

Inflation has continued to rise because of the diminishing effect of past falls in commodity prices, the IMF said, forecasting average inflation at around 3 percent this fiscal year.

Discussions with Pakistan on the twelfth and last review under the IMF programme are tentatively planned for August, the fund said.

Pakistan’s finance minister Ishaq Dar told a news conference: “This year, our cotton crop has been damaged a bit, and our result will be a bit mixed, but we expect to hit approximately 5.0 percent growth…Next year we are estimating even more ambitious targets of about 6.0 percent growth.”

He added, “This country has the potential to hit 7.0 percent GDP growth.”

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