IMF may consider approval of PRGF 8th tranche on June 23

The International Monetary Fund (IMF) Board is likely to consider the approval of the eighth tranche of its Poverty Reduction and Growth Facility (PRGF) for Pakistan on June 23.
A two-member mission headed by Milan Zavadajl, Division Chief, Middle Eastern Department met Finance Minister Shaukat Aziz on Tuesday and discussed budget proposals tabled in the Parliament.
The tranche size could be around $ 249 million (172 million SDRs) and it would be the second last release before the PRGF would lapse in December this year.
The finance minister during the meeting explained to the IMF team that on the basis of base year 1980-81 the budget deficit has been calculated at 4 percent. This approval of base year would be given by the IMF Board to use this data in the IMF documents, when the review completion would be approved.
Shaukat apprised the mission about the change of base and consequent new rates of growth on 6.4 percent and 6.6 percent for 2003-04 and 2004-05.
The last review mission, which discussed the data till March while concluding said, "The mission supported the authorities intentions to continue structural reforms of the fiscal system (in tax administration, public expenditure management and transparency).
It welcomes the authorities initiatives to better monitor and understand the developments in social and welfare indicators through timely surveys and to increase the effectiveness of social and poverty-related expenditures.
"In the financial sector, it concurred with the authorities intentions to promote development of savings institutions on a market basis, including the eventual transformation of the National Savings Scheme (NSS) into a modern savings institution, probably in the form of a mutual fund."
The mission supported the authorities' plans to further reform the power sector. The strategy which they have outlined is comprehensive, based on sound principles, and introduces greater transparency with regard to the remaining government interventions based on social considerations.
The mission urged the authorities to implement this strategy as soon as possible.
The mission also supported the intention of the authorities to continue with their ambitious privatisation programme in energy, industrial, financial, and transport sectors.