ISLAMABAD: An IMF official says Pakistan’s economy is improving, helped by prudent monetary and fiscal policies, strong capital inflows, robust remittances, and lower international oil prices.
This was mentioned in a statement issued by International Monetary Fund (IMF) Middle East and Central Asia Department Director Masood Ahmed at the conclusion of his visit to Pakistan.
He said that the authorities have made progress with consolidating macroeconomic stability, strengthening public finances, and re-building foreign exchange buffers. As a result, immediate crisis risks have greatly receded, economic growth is gaining strength, inflation is declining, and macroeconomic vulnerabilities are gradually addressed, he added.
Ahmed said the current improved economic and financial situation presents a unique opportunity for Pakistan to reinforce and build on recent stability gains to work towards achieving higher, sustainable and inclusive economic growth.
He said this will require further bolstering government revenues through broadening the tax base and improving compliance in order to generate the resources that will allow for further reducing public debt while increasing spending in priority areas such as public investment, health and education.
It will also require a further build-up of international reserves, which will strengthen Pakistan’s financial resilience while supporting exports, he said. Other key priorities, he added, include stemming the accumulation of arrears and addressing long-standing imbalances in the energy sector; restructuring and privatising public sector enterprises; moving ahead with investment climate and trade policy reforms; and continuing with financial sector reforms to improve resilience and financial inclusion.
In this context, it will be critical to protect the most vulnerable from the direct and indirect impacts of economic reforms through continued expansion of targeted social assistance, he said.
Ahmed said the IMF remains fully committed to supporting the authorities’ efforts through financing, policy advice and technical assistance, including through the ongoing Extended Fund Facility (EFF) arrangement. Firm implementation of the authorities’ reform agenda will be crucial to overcome the economic imbalances, build investor confidence, and move the country on a higher growth path, and “we are looking forward to a successful conclusion of the EFF arrangement,” he said.
The IMF official during his visit to Islamabad and Lahore from March 6-9, held meetings with Prime Minister Nawaz Sharif, Finance Minister Ishaq Dar, State Bank of Pakistan Governor Ashraf Wathra, Punjab Chief Minister Shahbaz Sharif, members of Pakistan’s economic team, as well as members of the parliament, academics and the business community.