The International Monetary Fund (IMF) will approve the first review of 7.6 billion-dollar stand-by arrangement on March 30 and may release the 840 million dollars within days of approval, says an official. "The tentative date set for the approval of first review for the IMF second tranche is March 30", says an official, requesting not to be named.
The second tranche of 850 million dollars would be released just after the approval, said the sources. The IMF held first review of end-December performance and Annual Article IV Consultations in Dubai from mid-February to February 27 and downgraded the countrys growth rate estimates at 2.5 percent for current fiscal year - 2008-09.
The IMF has already said that Pakistan met all its target set for end-December. For current year, growth target o 2.5 percent with average inflation of 20 percent, which would be brought to 10 percent in June with estimates of improvement with four percent GDP growth rate and six percent inflation rate.
Pakistan fixed GDP growth rate of four percent with inflation six percent and fiscal deficit of 3.3 percent for the next fiscal year of 2009-10, says Prime Minister Advisor on Finance Shaukat Tarin.
This approval would help improve public sentiments too as a political crisis had held up everything and some economic activity would pick up as the system gets stability. Current years fiscal deficit would be at 4.3 percent and would be reduced to 3.3 percent of the GDP for the next year.
Broad money growth is estimated to be eight percent as against 12 percent set earlier for the current fiscal year, the IMF staff agreed that current monetary stance was Suitable, but in coming weeks and months they were now looking at reduction in interest rates as core inflation comes down. The government expects to achieve economic stability within 24 months with four percent of current account deficit next fiscal, the signs of which are started emerging now.