ISLAMABAD - Pakistan and International Monetary Fund (IMF) on Thursday successfully concluded negotiations on eleventh review under the 3-year Extended Fund Facility (EFF) programme, which would pave way to release $510 million for the country.

The Executive Board of the IMF would approve to release $510 million likely by the end of June. "All end-March 2016 quantitative performance criteria, including the budget deficit target and the floor on the SBP's net international reserves, have been met. The indicative targets on social spending under the Benazir Income Support Program (BISP) and power sector arrears have also been met," said (IMF) staff mission Harald Finger after holding talks with Pakistan's economic team from May 2-11, 2016 in Dubai.

He further said that Pakistan's tax revenue collection continued to grow at a healthy pace in the third quarter of FY2015/16, and indicative target of Rs2105 billion missed by only Rs3 billion. Most structural benchmarks have also been met.

Pakistan had completed 11 reviews under the 3-year Extended Fund Facility (EFF) programme for an amount of $6.4 billion, which was approved in September 2013. The twelfth and last review under the programme is tentatively planned for August this year.

Finger reiterated that Pakistan would achieve 4.5 percent economic growth during ongoing financial year as against the target of 5.5 percent. "Growth remains robust despite a weak cotton harvest and declining exports amid a more challenging global environment. Real GDP growth is expected to reach 4.5 percent in FY 2015/16 and 4.7 percent in FY 2016/17, helped by favorable oil prices, rising investment, including related to the China Pakistan Economic Corridor (CPEC), improvements in energy supply, buoyant construction activity, and acceleration of credit growth" he remarked. 

He went on to say that headline consumer price inflation has continued to rise, owing to diminishing effects of past declines in commodity prices. Average inflation is expected at around 3 percent in FY 2015/16, remaining well anchored by continued prudent monetary policy. Gross international reserves reached $16.1 billion in March 2016, covering close to four months of prospective imports.

The IMF welcomed the government's plans to continue with fiscal consolidation in the coming fiscal year, further expand the tax net, strengthen the fiscal responsibility framework, address financial losses in the public enterprises, continue to pursue energy sector reforms and accelerate competitiveness-enhancing improvements in the business climate.

Addressing a press conference with IMF chief Mission in Dubai, Finance Minister Ishaq Dar said government would achieve eight years highest growth rate of 5 percent this year, which is far less than the target of 5.5 percent due to the damage to cotton crop. For the next fiscal year, growth is projected at over 6 percent in our macroeconomic framework, he added.

Large Scale Manufacturing (LSM) sector recorded 4.4 percent growth during Jul-Feb 2016, which is the highest in the last 8 years. Electricity and gas supplies continued to improve since the start of the current fiscal year. The CPEC will also play a significant role in further boosting economic activities.

He hoped that government would achieve the tax collection target of Rs3.1 trillion during ongoing fiscal year. "No downward revision has been made in FBR targets and we are on course to achieving the originally fixed targets", he said and added that tax collection showed growth of 19 percent as FBR collected Rs2103 billion during nine months (July-March) of the current fiscal year against the target of Rs2105 billion.

He informed that government would bring down the budget deficit to 4.3 percent of the GDP by the end of June 2016. "We are also committed to reduce public debt, and lay the foundations for a more sustained growth", he remarked.

Dar said that inflation remained contained to less than 3 percent during the period Jul-Apr FY 2016 as compared to 8.62 percent in FY 2014 and 4.53 percent in FY 2015. Meanwhile, the ratio of FBR taxes to GDP has improved significantly over the last two years, from 8.45 percent in FY 2013 to 9.5 percent in FY 2015, and is projected to increase to 10.2 percent in the current fiscal year.

Talking about balance of payments, finance minister said external sector is stable on the back of continued growth in remittances despite high base, continued flows from IFIs (International Financial Institutions), stable exchange rate, and low oil prices, which helped contain the current account deficit. The foreign exchange reserves are close to $21 billion as of May 9th, 2016 of which SBP reserves stood at $16.125 billion and that of scheduled banks at $4.802 billion.

On social protection, Ishaq Dar said government enhanced the allocation of BISP cash transfers from Rs.40 billion in FY 2013 to Rs.107 billion in FY 2016; increasing the coverage from 3.7 million to 5.3 million families; and extensively enhanced income support annual stipend from Rs.12000 to Rs.18800 during this period.

"We are working to reduce energy shortages with special emphasis to ensure sustained supply to industry with the goal of adding over 10,000 MW of electricity to the system by March 2018", he said. The government has added imported Liquefied Natural Gas (LNG) to the system, which has improved energy supply in the country, especially to the industrial sector, as the import of LNG has doubled to 400 mmcfd.

Talking about Public Sector Entities (PSEs), he said, "We are continuously working to reform PSEs focusing on improving                 performance, reducing losses and improvement in service delivery". The Pakistan Stock Exchange (PSX) has scaled new height of 36,265 index on 10th May, 2016 crossing the highest index achieved previously in August, 2015 indicating robust economic activity and reflecting investor confidence.