IMF to release last installment of $6.6 billion loan to Pakistan

ISLAMABAD: The International Monetary Fund (IMF) has announced it will release the last installment of a $6.6 billion economic bailout package to Pakistan, as Prime Minister Nawaz Sharif hailed an end to the country’s reliance on the lender.

The decision to release the final tranche worth $102 million of the three-year programme came after a review of the country’s economic performance that found it was meeting most reform indicators but still needed to broaden the tax net.

The IMF delegation head Harald Finger said growth was projected to reach five percent supported by a construction boom linked to the China Pakistan Economic Corridor, an ambitious infrastructure upgrade project intended to link China’s western Xinjiang region to the Gwadar port on the Arabian Sea.

“All indicative targets and structural benchmarks (SB) were met, except for the delayed notification of multi-year tariffs for three power distribution companies,” Finger said on Thursday in Dubai, referring to measures intended to reduce major fluctuations in electricity costs.

The release of the final tranche is subject to approval by the IMF’s executive board though that is considered a formality.In Islamabad, Sharif told lawmakers from his party that his government had ended the country’s reliance on foreign multilateral assistance and was saying “goodbye” to the Fund. “With the grace of God, we will say goodbye to IMF after this (agreement),” he said.

Sharif had been under pressure from the opposition for seeking the loan in 2013 because its conditions included forcing the government to raise taxes and energy prices.The IMF note cautioned however that to consolidate and reinforce the gains achieved in the last three years, it was important to “strengthen public finances and external buffers, broaden the tax net, (and) improve public financial management,” among other measures.