IMF praises Pakistan\u2019s efforts in improving anti-money laundering, combating terrorism financing
\n islamabad
\nPakistan and the International Monetary Fund (IMF) have reached a staff-level agreement, the international money lender revealed Monday.
\n\u201cThe agreement is subject to approval by the Executive Board, following the implementation of prior actions, notably on fiscal and institutional reforms,\u201d reads a statement by the IMF.
\n\u201cCompletion of the review would make available SDR 750 million (about US$1,059 million), bringing total disbursements under the EFF to about US$3,027 million and helping unlock significant funding from bilateral and multilateral partners.\u201d
\nThe IMF recognised that \u201cdespite a difficult environment\u201d, Pakistan continues to make progress on implementing the Extended Fund Facility programme.
\n\u201cAll quantitative performance criteria (PCs) for end-June were met with wide margins, except for that on the primary budget deficit,\u201d stated the IMF.
\nIt listed the finalization of the National Socio-Economic Registry (NSER) update, the parliamentary adoption of the National Electric Power Regulatory Authority (NEPRA) Act Amendments as \u201cnotable achievements\u201d by the Pakistani authorities.
\nThe IMF also acknowledged Pakistan\u2019s efforts in improving anti-money laundering and combating the financing of terrorism framework.
\nIt also approved of Pakistan\u2019s decision of the first tranche of outstanding arrears to Independent Power Producers (IPPs) to unlock lower capacity payments fixed in renegotiated power purchase agreements (PPAs).
\nIMF on the macroeconomic front
\nThe IMF praised Pakistan\u2019s response to the coronavirus pandemic, adding that it had helped control the ramifications of the coronavirus pandemic. It also spoke highly of the Federal Board of Revenue\u2019s (FBR) tax revenue collection, saying that it has been \u201cstrong\u201d.
\nThe IMF stated that Pakistan was bearing the brunt of external pressures in the form of a widening current account deficit and the depreciation of the exchange rate.
\nHowever, the international money lender said these were reflecting \u201cthe compound effects of the stronger economic activity, an expansionary macroeconomic policy mix, and higher international commodity prices.\u201d
\n\u201cThe State Bank of Pakistan (SBP) has also taken the right steps by starting to reverse the accommodative monetary policy stance, strengthening some macroprudential measures to contain consumer credit growth, and providing forward guidance,\u201d it said.
\nThe IMF said that Pakistan had shared with it its plans to introduce several fiscal measures to target a small reduction of the primary deficit with respect to last fiscal year based on:
\n(i) High-quality revenue measures to make the tax system simpler and fairer (including through the adoption of reforms to the GST system)
\n(ii) Prudent spending restraint, while fully protecting social spending.
\nThe IMF said that if Pakistan keeps up these fiscal policies, it will help the country reach, or exceed, 4% growth in FY 2022 and 4.5% in FY2023.
\n\u201cHowever, inflation remains high, although it should start to see a declining trend once the pass-through of rupee depreciation is absorbed, and temporary supply-side constraints and demand-side pressures dissipate,\u201d said the IMF.
\nThe IMF warned that the current account is expected to widen this year despite some growth in Pakistan\u2019s exports. It said this widening of the deficit will be reflective of the rise in prices of commodities worldwide and the rising import demand in the country. <\/p>\n","protected":false},"excerpt":{"rendered":"
IMF praises Pakistan\u2019s efforts in improving anti-money laundering, combating terrorism financing islamabad Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement, the international money lender revealed Monday. \u201cThe agreement is subject to approval by the Executive Board, following the implementation of prior actions, notably on fiscal and institutional reforms,\u201d reads a statement […]<\/p>\n","protected":false},"author":2,"featured_media":116751,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[2],"tags":[689,186,20],"class_list":{"0":"post-228850","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-news","8":"tag-agreement","9":"tag-imf","10":"tag-pakistan"},"yoast_head":"\n