Washington: The International Monetary Fund (IMF) on Friday approved immediate disbursement of $1.3 billion of financial assistance to Pakistan, as it noted that the country's vulnerability remains high.

A decision in this regard was taken by the IMF Executive Board following the completion of fourth review of Pakistan's economic performance under a programme supported by a Stand-By Arrangement (SBA). With this, the total disbursement to Pakistan so far has been $7.27 billion.

The IMF Board also approved re-phasing three remaining disbursements into two while keeping the total access under the arrangement unchanged, a media statement said.

Waiver

Pakistan's request for the waiver of two end-March 2010 quantitative performance criteria stipulated by the IMF for disbursement of the loan has also been approved.

It has also agreed to a request for modification of the end-June 2010 performance criteria for the budget deficit to increase the cumulative end-quarter ceilings by 0.15 per cent of gross domestic product (GDP) to allow space for urgent security outlays. Against a background of adverse security developments and a rapidly changing political environment, Pakistan's economic conditions have improved, Deputy Managing Director and Acting Chair Murilo Portugal said.

Real GDP growth has begun to pick up and the external position has strengthened.

“Nevertheless, Pakistan's vulnerabilities remain high, due to persistent inflation, security-related spending pressures, energy-sector problems, and shortfalls in revenue collection and external financing,” Mr. Portugal said. — PTI