Minister of Finance of Pakistan Ishaq Dar said here on Saturday his country's economic conditions have improved based on governmental reforms and he was optimistic that additional International Monetary Fund (IMF) support worth 1.1 billion dollars would be made available by December.
Dar said he expected the economy of his country to grow by 5.1 percent in the fiscal year 2014/2015 which started on July 1, 2014.
The Minister spoke at a joint press conference to the media on the occasion of the IMF staff mission led by Jeffrey Franks, advisor in the IMF's Middle East and Central Asian department. The IMF has demanded reforms from the government to liberalize the economy and to ease restrictions on cross-border trade and foreign investments in exchange for more help.
Franks noted positively that Pakistan's inflation was "on a downward trajectory" and credit to the private sector was expanding "at a robust pace".
Both Dar and Franks agreed that the decline in oil prices will ease fiscal pressure and improve the country's balance of payments. Pakistan with a total population of 182 million is a net importer of crude oil and of petrochemical products. According to Dar, the sharp decline in oil price would improve Pakistan's balance of payments as his country would have to pay less of 1 billion dollars for oil imports in the current fiscal year.
The IMF's Franks said he was pleased about concluding the discussions on the fourth and fifth review of Pakistan's 6.6 billion dollars extended fund facility (EFF) which were approved by the IMF's executive board on Sept. 4 2013.
The IMF executive board will meet in December and will consider the fourth and fifth review report. Upon the board's approval, 1.1 billion dollars will be made available to Pakistan. The views by the IMF staff team however do not represent the views of the IMF board.
Finance Minister Dar said his country would push forward in reforming the economy to attract foreign direct investments and spur domestic tax collections.
Franks said despite some difficulties, the Pakistani authorities' reform program remains "broadly on track," but the country had suffered recently some setbacks due to political instability and floods which in September hit the Punjab region.
The IMF official said continued efforts were needed to improve the tax-to-GDP ratio and create resources to finance much-needed spending on investment and social development, "while making the taxation system more efficient, transparent and equitable.