ISLAMABAD - Pakistan is all set to say goodbye to the International Monetary Fund (IMF) after successfully completing the 12th and final Review under the 3-year Extended Fund Facility (EFF) programme for $6.4 billion.

The IMF in Dubai has cleared payment to Pakistan of the final $102 million tranche after holding talks that began on July 26 and finished on August 4, 2016.

Now the Executive Board of the Fund would give a formal approval to release $102 million for Pakistan in September.

The PML-N government had entered into IMF programme in September 2013, when the country's foreign exchange reserves were depleting sharply.

Pakistan did not have reserves of around $23 billion, enough to cover import bill of four months.

Pakistan sought two waivers from the Fund after failing to prevent the budget deficit and achieving net domestic assets (NDA) of the State Bank of Pakistan (SBP).

"The programme’s performance in the fourth quarter of FY2015/16 was solid. Most of the June end 2016 quantitative performance criteria (PCs) were met, although the ceilings on the budget deficit and NDA of the SBP exceeded by small margins," said IMF staff mission official Harald Finger in a statement after holding talks with Pakistan's economic side led by Finance Minister Ishaq Dar.

He further said that all indicative targets and structural benchmarks (SB) were met, except for the delayed notification of multi-year tariffs for three power distribution companies.

"Growth is expected to reach 5 percent in FY 2016/17, supported by buoyant construction activity, strengthened private sector credit growth, and an investment upturn related to the China-Pakistan Economic Corridor (CPEC),” the official said, and added, “Nevertheless, a challenging global environment and declining exports are weighing on growth prospects. Average inflation is expected at around 5.2 percent in FY 2016/17, remaining well-anchored by continued prudent monetary policy.”

He further said that gross international reserves reached $18.1 billion at end of June 2016, covering over four months of prospective imports.

Finger went to say that in the course of the IMF-supported programme, Pakistan's economy made significant progress on achieving financial stability, and laying foundations for a higher, more sustainable and inclusive growth.

“Growth gradually accelerated, international reserves buffers were rebuilt, and the budget deficit narrowed significantly, helped by sizeable growth in tax revenues. Inflation declined, helped by lower oil prices and improved monetary and fiscal policies,” he said, and added, “Regulatory reforms and improved energy sector performance have slowed the accumulation of arrears and reduced outages.”

He further said that coverage of the Benazir Income Support Programme (BISP) had expanded, and stipends increased by over 60 percent.

“Regulations to fight money laundering and financing of terrorism have been strengthened. Despite some delays, the authorities continue to advance in their work towards restructuring and divesting ailing public sector enterprises (PSEs),” he added.

The IMF official hoped that in order to consolidate and reinforce the gains achieved in the last three years, the economic reforms agenda needed to be continued even after the programme ended.

“In this context, it will be important to further strengthen public finances and external buffers, broaden the tax base, improve public financial management, strengthen the monetary policy framework, compensates losses of PSEs, complete energy sector reforms, and accelerate competitiveness-enhancing improvements of the business climate, including the trade regime,” he suggested.

Finance Minister Ishaq Dar told the media that successful completion of the last Review was indicative of government's strong commitment to implement difficult structural reforms in the areas of taxation, energy, monetary/financial sectors and public sector enterprises.

"We met the June end 2016 Quantitative Performance Criteria on net international reserves, foreign currency swap/forward position, and government borrowing from SBP by significant margins,” he said, and admitted, “The targets set for net domestic assets and budget deficit were missed marginally."

He further said that indicative target for cash transfers through BISP and for power sector arrears were met.

Highlighting the economic achievements, Dar said that Pakistan's GDP rate had reached 4.71 percent in FY2016, the highest in eight years.

“The industrial sector also recorded highest growth of 6.8 percent in eight years. The government has surpassed the tax collection target of Rs3104 billion, as Rs3115 billion were collected in the last financial year,” Dar informed.

“FBR's tax-to-GDP ratio has registered a substantial increase of one percent. Foreign exchange reserves have increased to $23 billion, out of which SBP reserves now stand at $18.037 billion and that of scheduled banks at $4.960 billion,” the minister added.

“Inflation remained confined to less than 3 percent, at 2.89 percent during the period FY 2016,” he elaborated.

Talking about the budget deficit, the minister said that it remained at 4.6 percent of the GDP against the target of 4.3 percent, as provinces could not record surplus budget.

"We are also committed to reducing public debt, and lay the foundations for a more sustained growth," he expressed the resolve.

He said electricity loadshedding would be over in 2018 with the addition of over 10,000 MW of electricity to the system.

“As we move forward, our efforts would be to consolidate the economic gains achieved so far in order to move towards macroeconomic stability, higher growth and jobs creation,” he added.

Dar informed the government had given top priority to the social sector by expanding the BISP allocation from Rs40 billion in FY 2013 to Rs115 billion in FY 2017, and increasing the coverage from 3.7 million to 5.46 million families.

“The income support annual stipend was increased from Rs12000 to Rs.18800 during this period. The government has disbursed more than Rs250 billion to poorest families during the same period,” Dar concluded.