Pakistan has made progress in its economic reforms and the International Monetary Fund's board will likely meet in late June to decide whether to clear the way for the latest instalment in a $6.6 billion (3.9 billion pounds) loan, the fund said on Saturday.

The IMF "is encouraged by the overall progress made in pushing ahead with policies to strengthen macroeconomic stability and reviving investment and growth," said Jeffrey Franks, IMF mission chief for Pakistan .

"Economic indicators are generally improving, with growth gaining momentum, external finance improving, and credit to the private sector rising. However, core and headline inflation are also rising," Franks said in a statement.

A staff report was tentatively scheduled to be considered by the IMF executive board in late June and, if approved, the review would make an additional $550 million available to Pakistan , he said.

The IMF saved Pakistan from possible default by agreeing last September to lend it $6.6 billion over three years, making the loan conditional on economic reforms such as a longstanding promise to privatise loss-making state companies.

The IMF disburses loan tranches after confirming a country is on track with the conditions of the bailout. To date, Pakistan has received three tranches totalling about $1.6 billion from the lender.