Why the IMF was created and how it works

The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New
Hampshire, United States, in July 1944. The 44 countries at that conference sought to build a
framework for economic cooperation to avoid a repetition of the competitive devaluations that
had contributed to the Great Depression of the 1930s.

The IMF's responsibilities: The IMF's primary purpose is to ensure the stability of the international
monetary systemthe system of exchange rates and international payments that enables
countries (and their citizens) to transact with each other. The Fund's mandate was updated in
2012 to include all macroeconomic and financial sector issues that bear on global stability.

Fast Facts

Membership: 189 countries

Headquarters: Washington, D.C.
Executive Board: 24 Directors each representing a single country or a group of countries
Staff: Approximately 2,700 from 148 countries
Total quotas: US$668 billion (as of 9/13/16)
Additional pledged or committed resources: US$ 668 billion
Committed amounts under current lending arrangements (as of 9/8/16): US$159 billion, of which
US$144 billion have not been drawn (see table).
Biggest borrowers (amounts outstanding as of 8/31/16): Portugal, Greece, Ukraine, Pakistan
Biggest precautionary loans (amount agreed as of 9/8/16): Mexico, Poland, Colombia, Morocco
Surveillance consultations: 130 consultations in 2013 and 132 in 2014, and 124 in 2015
Capacity development: 274 person years in FY2013, 285 in FY2014, and 288 in FY2015
Original aims:
o promote international monetary cooperation;
o facilitate the expansion and balanced growth of international trade;
o promote exchange stability;
o assist in the establishment of a multilateral system of payments; and
o make resources available (with adequate safeguards) to members experiencing balance of
payments difficulties.
Our Work

The IMFs fundamental mission is to ensure the stability of the international monetary system. It
does so in three ways: keeping track of the global economy and the economies of member
countries; lending to countries with balance of payments difficulties; and giving practical help to
members.

Surveillance
The IMF oversees the international monetary system and monitors the economic and financial
policies of its 189 member countries. As part of this process, which takes place both at the global
level and in individual countries, the IMF highlights possible risks to stability and advises on
needed policy adjustments.

Lending

A core responsibility of the IMF is to provide loans to member countries experiencing actual or
potential balance of payments problems. This financial assistance enables countries to rebuild
their international reserves, stabilize their currencies, continue paying for imports, and restore
conditions for strong economic growth, while undertaking policies to correct underlying problems.
Unlike development banks, the IMF does not lend for specific projects.

Capacity Development

IMF capacity developmenttechnical assistance and traininghelps member countries design

and implement economic policies that foster stability and growth by strengthening their
institutional capacity and skills. The IMF seeks to build on synergies between technical assistance
and training to maximize their effectiveness.

Organization & Finances

The IMF has a management team and 17 departments that carry out its country, policy, analytical,
and technical work. One department is charged with managing the IMFs resources. This section
also explains where the IMF gets its resources and how they are used.

Management

The IMF has a Managing Director, who is head of the staff and Chairperson of the Executive Board.
The Managing Director is appointed by the Executive Board for a renewable term of five years and
is assisted by a First Deputy Managing Director and three Deputy Managing Directors.

Staff

The IMFs employees come from all over the world; they are responsible to the IMF and not to the
authorities of the countries of which they are citizens. The IMF staff is organized mainly into area;
functional; and information, liaison, and support responsibilities.

IMF resources

Most resources for IMF loans are provided by member countries, primarily through their payment
of quotas.

Quotas

Quota subscriptions are a central component of the IMFs financial resources. Each member
country of the IMF is assigned a quota, based broadly on its relative position in the world
economy.

Special Drawing Rights (SDR)

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member
countries official reserves.
Gold

Gold remains an important asset in the reserve holdings of several countries, and the IMF is still
one of the worlds largest official holders of gold.

Borrowing arrangements

While quota subscriptions of member countries are the IMF's main source of financing, the Fund
can supplement its quota resources through borrowing if it believes that they might fall short of
members' needs.

Governance
Governance Structure

The IMF has evolved along with the global economy throughout its 70-year history, allowing the
organization to retain a central role within the international financial architecture.

Country Representation

Unlike the General Assembly of the United Nations, where each country has one vote, decision
making at the IMF was designed to reflect the relative positions of its member countries in the
global economy. The IMF continues to undertake reforms to ensure that its governance structure
adequately reflects fundamental changes taking place in the world economy.

Accountability

Created in 1945, the IMF is governed by and accountable to the 189 countries that make up its
near-global membership.

Corporate Responsibility

The Fund actively promotes good governance within its own organization.

History

The IMF has played a part in shaping the global economy since the end of World War II.

Cooperation and reconstruction (194471)

As the Second World War ends, the job of rebuilding national economies begins. The IMF is
charged with overseeing the international monetary system to ensure exchange rate stability and
encouraging members to eliminate exchange restrictions that hinder trade.
Watch video

The end of the Bretton Woods System (197281)

After the system of fixed exchange rates collapses in 1971, countries are free to choose their
exchange arrangement. Oil shocks occur in 197374 and 1979, and the IMF steps in to help
countries deal with the consequences.

Debt and painful reforms (198289)

The oil shocks lead to an international debt crisis, and the IMF assists in coordinating the global
response.

Societal Change for Eastern Europe and Asian Upheaval (19902004)

The IMF plays a central role in helping the countries of the former Soviet bloc transition from
central planning to market-driven economies.

Globalization and the Crisis (2005 - present)

The implications of the continued rise of capital flows for economic policy and the stability of the
international financial system are still not entirely clear. The current credit crisis and the food and
oil price shock are clear signs that new challenges for the IMF are waiting just around the corner.

IMF Surveillance

April 20, 2017

A core responsibility of the IMF is to oversee the international monetary system and monitor the
economic and financial policies of its 189 member countries, an activity known as surveillance.
As part of this process, which takes place at the global, regional, and country levels, the IMF
identifies potential risks to stability and recommends appropriate policy adjustments needed to
sustain economic growth and promote financial and economic stability.

Why is IMF monitoring important?

Vigilant monitoring by the IMF is essential to identifying stability and growth risks that may
require remedial policy adjustments. Moreover, international cooperation on these efforts is
critical in todays globally integrated economy, in which the problems or policies of one country
can affect many others. IMF membership, which includes all but a handful of the worlds nations,
can facilitate this cooperation. IMF monitoring includes both bilateral surveillance, focused on
individual member countries, and multilateral surveillance, or oversight of the global economy.

Consulting with member states

IMF monitoring typically involves annual visits to member countries. During these visits IMF staff
engage government and central bank officials in discussions about risks to domestic and global
stability. These discussions focus on exchange rate, monetary, fiscal, and regulatory policies, in
addition to macro-critical structural reforms. IMF staff also attempt to meet with other
stakeholders, including members of the legislature and representatives from the business
community, labor unions, and civil society, among other groups. Comprehensive discussions with a
broad array of groups leads to better evaluations of each countrys economic policies and outlook.

Upon completion of their evaluation IMF staff present a report to the Executive Board for
discussion. The Boards views on the report are then transmitted to the countrys authorities,
concluding a process known as an Article IV consultation. In recent years, surveillance has become
more transparent and most member countries now publish a press release summarizing the staff
report and accompanying analysis, as well as the views of the Board.

Global oversight

The IMF also monitors regional and global economic trends and analyzes the impact that member
country policies may have on neighboring countries and the global economy. It issues periodic
 reports on these trends and analysis. The World Economic Outlook provides detailed analysis of
the global economy and its growth prospects, addressing issues such as the macroeconomic
effects of global financial turmoil and the potential for global spillovers, especially those that may
result from the economic, fiscal, and monetary policies of large, globally central economies such as
the United States, China, and the euro area. The Global Financial Stability Report assesses global
capital markets and financial imbalances and vulnerabilities that pose potential risks to financial
stability. The Fiscal Monitorupdates medium-term fiscal projections and assesses developments in
public finances. The IMF also publishes Regional Economic Reports that provide detailed analysis
of major regions of the world.

The IMF cooperates closely with other groups, including the Group of Twenty industrialized and
emerging market economies, and since 2009 has supported the G20s efforts to sustain
international economic cooperation through its mutual assessment process. The IMF analyzes
member country policies to determine how consistent they are with the goal of sustained and
balanced global growth. It also prepares External Sector Reports that examine the external
positions of systemically large economies, begun on a pilot basis in 2012. And twice a year the IMF
issues a Global Policy Agenda that pulls together the key findings and policy advice from
multilateral reports and proposes a future agenda for the IMF and its members.

Improving IMF surveillance

The IMF reviews its surveillance and monitoring activities every three years. The 2011 Triennial
Surveillance Review highlighted progress in addressing weaknesses in pre-crisis surveillance, yet it
also found that significant gaps remained. In particular, IMF monitoring activities were found to be
too fragmented, with risk assessments lacking depth and sufficient focus on interconnections and
transmission of shocks. The review recommended improvements in six key areas:
interconnectedness, risk assessments, external stability, financial stability, traction, and the legal
framework.

As part of broader efforts to improve surveillance, in July 2012 the Executive Board adopted
the Integrated Surveillance Decision, designed to strengthen the underlying legal framework for
monitoring. In September 2012 the Board endorsed a Financial Surveillance Strategy that proposes
concrete steps to further strengthen IMF monitoring activities. These actions help ensure that the
IMF is in a better position to address spillovers from members policies on global stability; to
monitor members external sectors in a more comprehensive manner; to better engage members
in constructive dialogue; to more effectively safeguard the operation of the international
monetary system; and to support global economic and financial stability.

The 2014 Triennial Surveillance Review builds on these reforms by identifying five operational
priorities for strengthening surveillance:

Integrate and deepen risk and spillover analysis

Mainstream macro-financial surveillance

Pay more attention to structural policies, including labor market issues

Deliver more cohesive and expert policy advice

Develop a client-focused approach to surveillance with clear and candid communication.

The Managing Directors Action Plan for Strengthening Surveillance outlines concrete measures
needed to advance all of these priorities, and work is under way to strengthen each of them in
consultation with the Executive Board. IMF staff will prepare an interim implementation
assessment in 2017 to update the Board on progress.

IMF Lending

May 25, 2017

A core responsibility of the IMF is to provide loans to member countries experiencing actual or
potential balance of payments problems. This financial assistance helps countries in their efforts
to rebuild their international reserves, stabilize their currencies, continue paying for imports, and
restore conditions for strong economic growth, while undertaking policies to correct underlying
problems. Unlike development banks, the IMF does not lend for specific projects.

When can a country borrow from the IMF?

A member country may request IMF financial assistance if it has an actual or potential balance of
payments needthat is, if it lacks or potentially lacks sufficient financing on affordable terms to
meet its net international payments (e.g., imports, external debt redemptions) while maintaining
adequate reserve buffers going forward. IMF resources provide a cushion that eases the
adjustment policies and reforms that a country must make to correct its balance of payments
problem and help restore conditions for strong economic growth.

The changing nature of IMF lending

The volume of loans provided by the IMF has fluctuated significantly over time. The oil shock of
the 1970s and the debt crisis of the 1980s were both followed by sharp increases in IMF lending. In
the 1990s, the transition process in Central and Eastern Europe and the crises in emerging market
economies led to further surges of demand for IMF resources. Deep crises in Latin America and
Turkey kept demand for IMF resources high in the early 2000s. IMF lending rose again since late
2008 in the wake of the global financial crisis.

The process of IMF lending

Upon request by a member country, IMF resources are usually made available under a lending
arrangement, which may, depending on the lending instrument used, specify the economic
policies and measures a country has agreed to implement to resolve its balance of payments
problem. The economic policy program underlying an arrangement is formulated by the country in
consultation with the IMF and is in most cases presented to the FundsExecutive Board in a Letter
of Intent and is further detailed in the annexed Memorandum of Understanding. Once an
arrangement is approved by the Board, IMF resources are usually released in phased installments
as the program is implemented. Some arrangements provide very strongly performing countries
with one-time up-front access to IMF resources and thus are not subject to explicit policy
understandings.

IMF lending instruments

The IMFs various loan instruments are tailored to different types of balance of payments need
(actual, prospective, or potential; short-term or medium-term) as well as the specific
circumstances of its diverse membership. Low-income countries may borrow on concessional
terms through facilities available under the Poverty Reduction and Growth Trust (PRGT; see IMF
Support for Low-Income Countries). Concessional loans carry zero interest rates until the end of
2018.

Non-concessional lending

The IMFs instruments for non-concessional loans are Stand-By Arrangements (SBA); the Flexible
Credit Line (FCL); the Precautionary and Liquidity Line (PLL); for medium-term needs, the Extended
Fund Facility (EFF); and for emergency assistance to members facing urgent balance of payments
needs, the Rapid Financing Instrument (RFI). All non-concessional facilities are subject to the IMFs
market-related interest rate, known as the rate of charge, and large loans (above certain limits)
carry a surcharge. The rate of charge is based on the SDR interest rate, which is revised weekly to
take account of changes in short-term interest rates in major international money markets. The
maximum amount that a country can borrow from the IMF, known as its access limit, varies
depending on the type of loan, but is typically a multiple of the countrys IMF quota. This limit may
be exceeded in exceptional circumstances. The Stand-By Arrangement, the Flexible Credit Line and
the Extended Fund Facility have no pre-set cap on access.

Stand-By Arrangements (SBA) . Historically, the bulk of non-concessional IMF assistance has been
provided through SBAs. The SBA is designed to help countries address short-term balance of
payments problems. Program targets are designed to address these problems and disbursements
are made conditional on achieving these targets ( conditionality). The length of a SBA is typically
1224 months, and repayment is due within 3-5 years of disbursement. SBAs may be provided
on a precautionary basiswhere countries choose not to draw upon approved amounts but retain
the option to do so if conditions deteriorate. The SBA provides for flexibility with respect to
phasing, with front-loaded access where appropriate.

Flexible Credit Line (FCL) . The FCL is for countries with very strong fundamentals, policies, and
track records of policy implementation. FCL arrangements are approved, at the member countrys
request, for countries meeting pre-set qualification criteria. The length of the FCL is either one
year or two years with an interim review of continued qualification after one year. Access is
determined on a case-by-case basis, is not subject to access limits, and is available in a single up-
front disbursement rather than phased. Disbursements under the FCL are not conditional on
implementation of specific policy understandings as is the case under the SBA because FCL-
qualifying countries have a demonstrated track record of implementing appropriate
macroeconomic policies. There is flexibility to either draw on the credit line at the time it is
approved or treat it as precautionary. The repayment term of the FCL is the same as that under
the SBA.

Precautionary and Liquidity Line (PLL) . The PLL is for countries with sound fundamentals and
policies, and a track record of implementing such policies. PLL-qualifying countries may face
moderate vulnerabilities and may not meet the FCL qualification standards, but they do not
require the substantial policy adjustments normally associated with SBAs. The PLL combines
qualification (similar to the FCL but with a lower bar) with focused conditions that aim at
addressing the identified remaining vulnerabilities. Duration of PLL arrangements range from
either six months or one- to two years. One-to-two year PLL arrangements are subject to semi-
annual reviews. Access under six-month PLL arrangements is limited to 125 percent of quota in
normal times, but this limit can be raised to 250 percent of quota in exceptional circumstances
where the balance of payments need is due to exogenous shocks, including heightened regional or
global stress. One- to two-year PLL arrangements are subject to an annual access limit of 250
percent of quota, and all PLL arrangements are subject to a cumulative cap of 500 percent of
quota. There is flexibility to either draw on the credit line or treat it as precautionary. The
repayment term of the PLL is the same as for the SBA.
Extended Fund Facility (EFF) . This facility helps countries address medium- and longer-term
balance of payments problems reflecting extensive distortions that require fundamental economic
reforms. Its use has increased substantially in the recent crisis period, reflecting the structural
nature of some members balance of payments problems. Arrangements under the EFF are
typically longer than SBAsnormally not exceeding three years at approval. However, a maximum
duration of up to four years is also allowed, predicated on the existence of a balance of payments
need beyond the three-year period, the prolonged nature of the adjustment required to restore
macroeconomic stability, and the presence of adequate assurances about the members ability
and willingness to implement deep and sustained structural reforms. Repayment is due within
410 years from the date of disbursement.

Rapid Financing Instrument (RFI). The RFI was introduced to replace and broaden the scope of the
earlier emergency assistance policies. The RFI provides rapid financial assistance with limited
conditionality to all members facing an urgent balance of payments need. Access under the RFI is
subject to an annual limit of 37.5 percent of quota and a cumulative limit of 75 percent of quota.

Concessional Lending

The Funds concessional facilities for Low Income Countries (LICs) under the PRGT were reformed
in 2010 with refinements in 2013 as part of broader efforts to make the Funds financial support
more flexible and better tailored to the diverse needs of LICs. The norms and limits for
concessional facilities were expanded in 2015 to maintain their levels relative to increasing
production, trade, and capital flows. Financing terms have been made more concessional, and the
interest rate is reviewed every two years (currently zero percent until end-2018). All facilities
support country-owned programs aimed at achieving a sustainable macroeconomic position
consistent with strong and durable poverty reduction and growth. Better-positioned PRGT-eligible
countries may receive blended Fund financial support that mixes nonconcessional and
concessional resources.

The Extended Credit Facility (ECF) is the Funds main tool for medium-term support to LICs facing
protracted balance of payments problems. Financing under the ECF currently carries a zero
interest rate, a grace period of 5 years, and a final maturity of 10 years.

The Standby Credit Facility (SCF) provides financial assistance to LICs with short-term or potential
balance of payments needs. The SCF can be used in a wide range of circumstances, including on a
precautionary basis. Financing under the SCF currently carries a zero interest rate, with a grace
period of 4 years, and a final maturity of 8 years.

The Rapid Credit Facility (RCF) provides rapid financial assistance with limited conditionality to
LICs facing an urgent balance of payments need. The RCF streamlines the Funds emergency
assistance for LICs, and can be used flexibly in a wide range of circumstances. Financing under the
RCF currently carries a zero interest rate, has a grace period of 5 years, and a final maturity of 10
years.

IMF Executive Board Concludes Article IV Consultation with Pakistan

June 16, 2017

On June 14, 2017, the Executive Board of the International Monetary Fund (IMF) concluded the
Article IV consultation [1] with Pakistan.
Pakistans outlook for economic growth is favorable, with real GDP estimated at 5.3 percent in FY
2016/17 and strengthening to 6 percent over the medium term on the back of stepped-up China
Pakistan Economic Corridor (CPEC) investments, improved availability of energy, and growth-
supporting structural reforms. Inflation has been gradually increasing but remains contained, and
the financial sector has remained sound.

However, macroeconomic stability gains made under the 2013-16 EFF-supported program have
begun to erode and could pose risks to the economic outlook. Fiscal consolidation has slowed,
with the 2016/17 budget deficit target of 4.2percent of GDP (authorities latest projection) likely
to be exceeded. The current account deficit has widened and is expected at 3 percent of GDP in
2016/17, driven by quickly rising imports of capital goods and energy. Foreign exchange reserves
have declined in the context of a stable rupee/dollar exchange rate. On the structural front, while
the successful implementation of business climate and financial inclusion reforms has continued,
some renewed accumulation of arrears in the power sector has been observed, and financial
losses of ailing public sector enterprises continue to weigh on scarce fiscal resources. Key external
risks include lower trading partner growth, tighter international financial conditions, a faster rise
in international oil prices, and over the medium term, failure to generate sufficient exports to
meet rising external obligations from large-scale foreign-financed investments.

Executive Board Assessment [2]

Directors commended the Pakistani authorities for strengthening macroeconomic resilience during
their 201316 Fund-supported program. Directors agreed that the growth outlook remains
favorable, but noted that policy implementation weakened recently and macroeconomic
vulnerabilities are reemerging. Against this backdrop, Directors called on the authorities to
safeguard the macroeconomic gains of recent years through continued implementation of sound
policies, and to continue with structural reforms to achieve higher and more inclusive growth.

Directors encouraged the authorities to strengthen fiscal consolidation. They noted that the FY
2017/18 budget aims at further gradual consolidation, albeit at a slower pace than targeted under
the Fiscal Responsibility and Debt Limitation (FRDL) Act, and will likely require additional revenue
measures in light of recent revenue underperformance. Directors emphasized that sustained fiscal
consolidation over the medium term, in line with the FRDL Act, is critical to strengthen economic
resilience, safeguard fiscal sustainability, and limit pressures on the current account and
international reserves. To this end, Directors recommended mobilizing additional tax revenues by
broadening the tax base and strengthening tax administration; and enhancing the composition of
public spending by containing the wage bills growth, further reducing electricity subsidies, and
increasing priority social spending. They also recommended strengthening the national fiscal
federalism framework and public debt management.

Directors stressed the importance of maintaining a prudent monetary policy stance to preserve
low inflation. They noted that monetary policy has been appropriately accommodative, and urged
the State Bank of Pakistan (SBP) to remain vigilant and be ready to tighten it in case inflationary
pressures emerge or foreign exchange market pressures intensify. Directors called on the
authorities to allow for greater exchange rate flexibilityrather than relying on administrative
measuresto help reduce external imbalances and bolster external buffers. In this regard, they
welcomed the authorities commitment to remove, within one year, the cash margin requirement
for imports of consumer goods, which constitutes an exchange restriction and multiple currency
practice. Directors welcomed ongoing progress in strengthening central bank autonomy, and
called for implementing the remaining recommendations from the 2013 Safeguards Assessment
and to phase out government borrowing from SBP. Directors saw many of the abovementioned
measures as preconditions for moving to an inflation targeting regime in the medium term.
Directors underscored the importance of further advancing financial sector reforms to continue
strengthening resilience and support financial deepening. They welcomed efforts to bring
undercapitalized banks into regulatory compliance, further strengthen the regulatory and
supervisory frameworks, address non-performing loans, and enhance the AML/CFT framework.
Directors looked forward to the operationalization of the new deposit insurance.

Directors stressed that further progress in the structural reform agenda is needed to make growth
more inclusive and reduce poverty. They welcomed the progress in fostering financial inclusion
and implementing the business climate reform strategy, and encouraged the authorities to press
ahead with these efforts. Directors also recommended further strengthening social safety nets.
They called for maintaining a strong regulatory framework in the energy sector, swiftly addressing
the renewed build-up of arrears in the sector, and ensuring its financial soundness. Directors
noted that restructuring and attracting private sector participation in public enterprises as well as
improving their governance will ensure their financial viability and economic efficiency while
reducing fiscal risks.

Pakistan: Selected Economic Indicators, 2012/132017/18 1/

Population: 195.4 million (2015/16)

Per capita GDP: US$1,454 (2015/16)
Poverty rate: 29.5 percent (2012/13)
Main exports: Textiles ($12.8 billion, 2015/16)
Unemployment: 5.9 percent (2014/15)

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Proj. Proj.

(Annual percentage change)

Output and prices

Real GDP at factor cost 3.7 4.1 4.1 4.5 5.3 5.5

GDP deflator at factor cost 7.1 7.4 4.3 0.6 3.5 5.0
Consumer prices (period
average) 7.4 8.6 4.5 2.9 4.3 5.0

Consumer prices (end of

period) 5.9 8.2 3.2 3.2 5.3 5.0

Pakistani rupees per U.S.

dollar (period average) 8.4 6.4 -1.5 2.7

(In percent of GDP)

Saving and investment

Gross saving 13.9 13.4 14.7 14.3 12.7 15.3

Government -5.1 -1.4 -1.6 -0.7 -0.5 2.0

Nongovernment (including
public sector enterprises) 19.0 14.7 16.3 15.0 13.2 13.3

Gross capital formation 2/ 15.0 14.6 15.7 15.6 15.8 18.5

Government 3.2 3.5 3.7 3.7 3.9 6.0

Nongovernment (including
public sector enterprises) 11.7 11.1 12.0 11.8 11.9 12.5

Public finances

Revenue and grants 13.5 15.2 14.5 15.5 15.8 17.6

Expenditure (including
statistical discrepancy) 21.9 19.8 19.1 19.2 20.2 21.6

Budget balance (including

grants) -8.4 -4.9 -5.3 -4.4 -4.3 -4.0

-8.5 -5.7 -5.4 -4.6 -4.5 -4.2

Budget balance (excluding
grants)

Primary balance -3.9 -0.3 -0.5 -0.1 -0.1 -0.1

General government debt

incl. IMF obligations 63.9 63.5 63.3 67.6 66.6 65.1

External general government

debt 21.1 20.2 18.9 20.8 21.3 21.5

Domestic general
government debt 42.8 43.3 44.4 46.8 45.4 43.6

(Annual changes in percent of initial stock of broad money, unless

otherwise indicated)

Monetary sector

Net foreign assets -3.5 3.7 2.2 1.7 0.1 0.4

Net domestic assets 19.3 8.8 11.0 11.9 13.3 11.4

Broad money (percent

change) 15.9 12.5 13.2 13.7 13.4 11.8

Reserve money (percent

change) 15.8 12.9 9.9 26.5 14.1 13.5

Private credit (percent

change) -0.2 12.1 5.9 11.1 13.0 13.5

Six-month treasury bill rate

(period average, in percent) 9.8 9.7 8.8 6.3

External sector

Merchandise exports, U.S.

dollars (percentage change) 0.4 1.1 -3.9 -8.8 -0.8 9.4
Merchandise imports, U.S.
dollars (percentage change) -0.6 3.8 -1.0 -2.0 12.6 6.6

Current account balance (in

percent of GDP) -1.1 -1.3 -1.0 -1.2 -3.0 -3.2

(In percent of exports of goods and services, unless otherwise

indicated)

External public and publicly

guaranteed debt 140.7 161.2 159.8 193.3 209.7 210.0

Debt service 21.6 26.2 20.7 22.9 29.2 21.4

Gross reserves (in millions of

U.S. dollars) 3/ 6,008 9,096 13,534 18,143 18,518 18,883

In months of next year's

imports of goods and
services 1.5 2.2 3.3 4.0 3.8 3.6

Memorandum items:

Underlying fiscal balance

(excl. grants; percent of GDP)
4/ -4.8 -4.2

General government and

government guaranteed debt
(incl. IMF; % GDP) 66.7 65.7 65.7 70.0 69.1 67.6

Net general government

debt (incl. IMF; % GDP) 60.1 58.0 58.2 61.2 60.3 58.9

Real effective exchange rate

(annual average, percentage
change) -1.3 0.9 10.9 4.6

Terms of trade (percentage

change) -1.9 0.2 7.0 10.7 -0.9 -0.9
Real per capita GDP
(percentage change) 2.1 2.6 2.0 2.5 3.3 3.5

GDP at market prices (in

billions of Pakistani rupees) 22,386 25,169 27,443 29,103 31,862 35,390

GDP at market prices (in

billions of U.S. dollars) 231.2 244.4 270.6 279.4

Sources: Pakistani authorities; World Bank; and IMF staff estimates and projections.
1/ Fiscal year ends June 30.
2/ Including changes in inventories
3/ Excluding gold and foreign currency deposits of commercial banks held with the State Bank of
Pakistan.
4/ Excludes one-off transactions, including asset sales.

[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with
members, usually every year. A staff team visits the country, collects economic and financial
information, and discusses with officials the country's economic developments and policies. On
return to headquarters, the staff prepares a report, which forms the basis for discussion by the
Executive Board.

[2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board,
summarizes the views of Executive Directors, and this summary is transmitted to the country's
authorities. An explanation of any qualifiers used in summings up can be found
here:http://www.imf.org/external/np/sec/misc/qualifiers.htm .