WASHINGTON: The International Monetary Fund (IMF) endorsed economic policies of the government on Monday and revised Pakistan’s GDP growth for this fiscal year to 4.3 per cent from 4.1pc.
The endorsement may help the government deal with the pressures generated by more than a week of unrelenting protest marches and rallies in Islamabad. Indications of a strong economy may further weaken PTI’s campaign for forcing the government to resign by causing a financial collapse.
An IMF team, led by the Fund’s mission chief in Pakistan Jeffrey Franks, visited Dubai from Aug 6 to 18 to conduct discussions on the fourth review of the country’s IMF-supported programme under the Extended Fund Facility.
The team had earlier refused to visit Islamabad due to PTI and PAT’s protest marches, compelling Finance Minister Ishaq Dar to visit Dubai for the talks.
The Fund is expected to release another tranche of $550 million early next month from the $6.67 billion bailout package for Pakistan.
“The IMF is encouraged by the overall progress made in pushing ahead with policies to strengthen macroeconomic stability and reviving investment and growth,” said a statement issued in Washington after the fourth review.
“Economic indicators are generally improving, with growth continuing to gain momentum, inflation on a downward trajectory, and credit to the private sector rebounding sharply.”
According to the IMF, the country’s “GDP growth is now expected to rise by 4.3pc in fiscal year 2014-15 (to June 30), compared to a provisional estimate of 4.1pc in FY2013-14.”
Mr Franks described his discussions with Mr Dar and his team as “useful”, and noted that the government’s reform programme was broadly on track through end-June.
The mission made excellent progress toward agreement on key policy issues going forward. “Discussions will be continuing in the coming days via videoconference from Washington, DC, with the aim of securing a timely completion of the fourth review,” he said.
“The mission reaffirms the IMF’s support to the government’s efforts to implement their economic reform agenda,” the statement said.
Earlier, Mr Dar told reporters in Dubai that the IMF had cancelled its visit to Islamabad where they were going to stay in a hotel just a few hundred meters from the PTI sit-in.