Senator Mohammad Ishaq Dar, Finance Minister and Mr. Harald Finger, IMF Mission Chief addressing a joint press conference in Dubai.



Press Release

4th August, 2016

Successful completion of Pakistan-IMF Extended Fund Facility Program

Senator Mohammad Ishaq Dar, Finance Minister and Mr. Harald Finger, IMF Mission Chief addressed a joint press conference on the successful completion of 12th Review under IMF Extended Fund Facility Programme her at Dubai.

The Minister said that Pakistan and the IMF had successfully completed negotiations on the Twelfth and final R-eview under the 3-year Extended Fund Facility (EFF) program for an amount of $6.4 billion.

He pointed out that the successful completion of the last Review was indicative of government’s strong commitment in implementing difficult structural reforms in the areas of taxation, energy, monetary/financial sectors and public sector enterprises.

Overall Program Performance

He said our performance throughout the program culminating in the Twelfth Review had been highly satisfactory: “We met the end-June 2016 Quantitative Performance Criteria on Net International Reserves, Foreign currency swap/forward position, and government borrowing from SBP by significant margins”. The targets on Net Domestic Assets and budget deficit were missed marginally, he stated. He said that the indicative target for end-June, 2016 on targeted cash transfers through BISP and on power sector arrears were met.

The Minister for Finance said the Federal Board of Revenue (FBR) not only achieved its annual target of RS.31 04 billion but exceeded it. “This indeed is a remarkable achievement as no downward revision was made in FBR revenue targets and the originally fixed target was achieved and exceeded which is an unprecedented accomplishment and speaks of the success of the economic policies being followed by the present Government”, he observed. He said that the performance of FBR became even more creditable when viewed in the context of the shortfall of Rs.40 billion recorded in the first quarter. He stated that in the subsequent quarters, the indicative targets were met wiping out the deficit of the first quarter. “Against an end-year target of Rs.31 04 billion, FBR collected Rs.3115 billion, according to provisional figures, which shows a growth in excess of 20 percent, over Rs.2589 billion collected in FY2015”, he mentioned. He said that in the process, the figure of FBR’s tax-to-GDP ratio registered a substantial increase of one percent.


Ishaq Dar said the government achieved real GDP growth rate of 4.71 percent in FY 2016, which was the highest in the last 8 years. He mentioned that since FY 2014, the government had maintained GDP growth rate of above 4 percent. “For the next fiscal year, GDP growth is targeted at 5.7 percent which will gradually steer to 7 percent in FY 2017”, he said.

The Minister said that the industrial sector recorded a growth of 6.8 percent during FY 2016 which was the highest in the last eight years. He further said that the LSM growth remained robust at 4.61 percent during FY 2016 compared to 3.29 percent last fiscal year while Automobiles registered growth at 23.4 percent followed by Fertilizers 16 percent, Rubber products
11.6 percent, Leather products 12.2 percent, and Chemicals 10 percent, Cement 10.4 percent and its dispatches witnessed uptick by over 17 percent; and there has been a continued credit expansion. A welcome development is the increase in fixed investment. Electricity and gas supplies continued to improve since the start of the current fiscal year. The Minister hoped that the CPEC would also play significant role in further boosting economic activities.

During the press conference, the Finance Minister said that the Pakistan Stock Exchange (PSX) had scaled new height of 39,800 index on 01st August, 2016 crossing the highest index achieved previously in August, 2015 indicating robust economic activity and reflecting investor confidence. He informed that the Inflation remained contained to less than 3 percent at 2.89
percent during the period FY 2016 as compared to 8.62 percent in
FY 2014 and 4.53 percent in FY 2015.

Balance of Payments

Commenting on the external sector, the minister said the sector was stable on the back of continued flows from IFls, low oil prices, rising remittances albeit at a slower pace, which helped narrow down the current account deficit and maintained stability in foreign exchange market. He stated that the foreign exchange reserves increased to $23 billion as of 22nd July 2016
of which SSP reserves stood at $18.037 billion and that of scheduled banks at $4.960 billion. The net International Reserves of the SSP have increased from a low of negative $2.5 billion at the start of the program to positive $7.5 billion by end-June 2016, Ishaq Dar said.

Following is the text of his press conference:-

Financial and Fiscal

Performance of the banking sector remained steady with higher earnings and robust solvency. The sector has high Return on Assets (RoA) of 2.2 percent and strong Capital Adequacy Ratio (CAR) of 16.1 percent, well above the 10.25 percent minimum regulatory requirement.

  1. We are continuing with the financial sector reforms agenda for strengthening the legal, regulatory and supervisory framework aimed at safeguarding stability of the financial sector.
    1. The budget deficit which stood at over 8 percent of GDP in FY 2013 was brought down to 5.3 percent in FY 2015 and to 4.6 percent in FY 2016. We are also committed to reduce public debt, and lay the foundations for a more sustained growth.
    2. Despite the fact that’ the government is reducing its fiscal deficit, allocation for Public Sector Development Program (PSDP) has more than doubled and social safety net expenditures have increased by over 300 percent through the four budgets of the current government.
      1. The ratio of FSR’s tax to GDP has improved significantly over the last three years, from 8A5 percent in FY 2013 to 10.5 percent in FY 2016, which is beyond the projected increase of 10.2 percent for the period.

Social Protection

  1. Government is committed to support the poor and the most vulnerable segments of population through BISP. With significant expansion in allocation of BISP cash transfers, which have been enhanced from RsAO billion in FY 2013 to Rs.115 billion in FY 2017 increasing the coverage from 3.7 million to 5.46 million families; and income support annual stipend from Rs.12000 to Rs.18800 during this period. The Government has disbursed more than Rs.250 billion to these poorest families during the same period.
  2. In partnership with provincial governments, significant progress has been made in rollout of the education-Conditional Cash Transfers (CCTs) to the targeted needy students. In comparison to 56,000 students in 2013 currently, more than 1.3 million children are beneficiaries of the CCT in 32 districts across the country. We will further expand the total number of children benefitting from the program to 1.6 million by June, 2017. Besides improving the payment mechanisms by introducing the bio-metric based payments, Government has also initiated the National Socio Economic Registry (NSER) update for a more objective and scientific targeting of deserving families.

Debt Management

  1. We continue to diversify financing from both domestic and external sources, lengthen the maturity profile of domestic debt and improve the balance between domestic and external debt. To achieve these objectives, we are working to further strengthen the Debt Policy Coordination Office (DPCO). We have appointed the Risk Management staff; and the Medium Term Debt Management Strategy (MTDS) has already been published. Rate setting between retail and wholesale markets have also been synchronized.

Energy Sector

  1. The Energy sector reforms are on priority agenda of the Government and are regularly monitored by the Prime Minister through the Cabinet Committee on Energy. To implement the reforms:
    1. We are working to reduce energy shortages with special emphasis to ensure sustained supply to industry with the goal of adding over 10,000 MW of electricity to the system by March 2018 along



with measures to make the sector self-sustainable in line with the demands of a modern power sector;

II. We have added imported Liquefied Natural Gas
(LNG) to the system, which has improved
energy supply -in the country, especially to the industrial sector, as the import of LNG has doubled to 400 mmcfd.

Business Climate Reforms

  1. For improving business climate, we have finalized and put into implementation a new countrywide ease of doing business reform strategy with time bound measures to strengthen business climate and foster private investments.
  2. We have developed a comprehensive National Financial Inclusion Strategy (NFIS) to implement financial reforms to meet financing needs of the marginalized and unbanked segments of society. The strategy lays particular emphasis on including the female gender into financial inclusion. Under SSP guidelines for opening ‘Asaan’ Simple and Small Accounts, banks and Microfinance banks have opened more than one million accounts. In addition,
    over 15 million m-wallets (digital accounts) have been opened in the country.

Public Sector Entities (PSEs)

  1. We are continuously working to reform PSEs focusing on improving performance, reducing losses and improvement in service delivery.

Before closing, the Minister has reiterated that Pakistan is committed to successfully implement the macroeconomic stability program announced by the Government in June 2013; and positive achievement in meeting the performance criteria under the Program reflected the seriousness with which the Program is being concluded. It is not only the quantitative targets but also the rich agenda of structural reforms being undertaken with the aim of stabilization of economy and creation of room for faster and inclusive growth, and poverty reduction.


We have successfully completed the negotiations of the last Review. This has been a good team effort from both sides. As we move forward, our effort would be to consolidate the economic gains achieved so far towards macroeconomic stability and work towards higher growth and
jobs creation,

Before conclusion of the joint press conference, the Minister complimented Mr. Harald Finger, the IMF Mission Chief and his team for an outstanding job they have done in conducting the last Quarterly Review.