Dubai: Pakistan economy is back on a strong growth trajectory and is expected to expand in excess of 6 per cent in the next financial year, starting July this year, said Ishaq Dar, Finance Minister of Pakistan.
Speaking at a joint press conference with the International Monetary Fund (IMF), which completed its 11th review of Pakistan’s economic reform programme supported by a three-year IMF Extended Fund Facility (EFF), Dar said, the government has made significant progress in achieving growth targets set at the beginning of the programme.
“We achieved a real GDP [gross domestic product] growth rate of 4.24 per cent in 2015, which is the highest in the last 7 years. In view of the damage to the cotton crop, the growth rate in the current year is expected to be around 5 per cent. For the next fiscal year the growth is projected at over 6 per cent,” Dar said.
The IMF staff mission to Pakistan headed by Harald Finger met with the finance minister Dar, State Bank of Pakistan Governor Ashraf Wathra and senior government officials in Dubai this week.
“After discussions with Pakistani Authorities we have reached a staff level agreement on completion of the eleventh review of the EFF arrangement. Upon completion of the review SDR 360 million will be made available to Pakistan,” said Finger.
The IMF mission welcomed the Pakistan government’s strong commitment to the programme in the third quarter of 2015-16.
“All end-March 2016 quantitative performance criteria including the budget deficit target and the floor on the State Bank of Pakistan’s net international reserves have been met,” said Finger.
Under the 3-year EFF programme, Pakistan had taken $6.4 billion in IMF funding to implement an economic reform package ranging from stabilisation of public finances including reduction in budget deficits, improving external finances, reform of the financial sector and restructuring and privatisation of state owned enterprises.
“The completion of the 11th review is indicative of the government’s strong commitment in implementing difficult structural reforms in areas of taxation, energy, financial sectors and public enterprises,” said Dar.
Discussions under the 12th and the last review of the programme are planned for August this year. The minister said with the last tranche of the EFF, Pakistan will be ending the current funding programme from the IMF as the government finances have improved substantially over the past 3 years.
Dar said the robust reform initiatives have starter bearing fruit in terms of improved investor confidence. The Pakistan Stock Exchange Index scaled a new high of 36,265 on May 10.
MSCI will release on June 14, 2016, the results of the 2016 Annual Market Classification Review. MSCI Pakistan Index is due for a potential reclassification to Emerging Markets, reflecting the underlying improvement in economy and the market.
