WASHINGTON: The International Monetary Fund’s Executive Board will meet before mid-April to review Pakistan’s loan after a meeting this month was postponed to enable a value-added tax law to be submitted to provincial assemblies, the IMF said on Wednesday.
The IMF meeting is to approve the fifth tranche of a loan to Pakistan, which
turned to the IMF for an emergency package of $7.6 billion in November 2008 to avert a balance-of-payments crisis and shore up reserves.
The IMF increased the loan to $11.3 billion in July and the central bank received the fourth tranche on Dec 28.
The IMF said its Pakistan mission recently held discussions for its fourth review and Pakistan’s programme was “progressing well.”
Performance criteria for end-December 2009 had been observed, the financial body said, except for the budget deficit target, which was missed by a small margin. It did not give details.
The IMF’s Executive Board was originally scheduled to meet on March 24 to approve the fifth tranche of the loan but the meeting was then postponed to March 31 and now until April because of a delay in implementing a VAT law.
The IMF had required Pakistan to submit the VAT law to parliament by the end of December 2009. VAT on services is a provincial issue and so requires approval of the country’s four provincial assemblies. “Executive Board discussion for the fourth review is being rescheduled for the first half of April in order to allow for the submission of VAT laws to provincial assemblies, which have now been submitted. Disbursement of the funding will take place when the Board completes the review,” said the IMF.
A specific date has not yet been fixed for the IMF Board meeting but Pakistan’s finance ministry said on Monday the provincial assemblies had completed the VAT process and the IMF had been informed.
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