WASHINGTON: The International Monetary Fund (IMF) has released its report after having concentrated discussions with Pakistan Government. IMF said in his report Pakistan is facing important economic challenges, with decreasing growth, high financial and current account deficits and low levels of international reserves.
The IMF released report on the base of an IMF team which visited Pakistan recently. According to the report, the IMF admits the government’s step for hiking prices of electricity and gas. The report stated that Islamabad has recently taken some policy measures, but said those were not enough and conclusive policy action and important external financing were needed to stabilize the economy.
The IMF team called for a further hike in gas and power tariffs. “Policies should include more exchange rate flexibility and monetary policy tightening, further fiscal adjustment anchored in a medium-term consolidation strategy, and strengthening the performance of key public enterprises together with further increases in gas and power tariffs.”
In its report, the team said that precedence areas include modernizing the tax system and public financial management, strengthening fiscal federalism arrangements, improving governance and removing losses of public enterprises, enhancing the State Bank of Pakistan’s autonomy, increasing AML/CFT efforts, improving the business climate and anti-corruption efforts, and fostering the economic inclusion of the poor, youth, and women.
It added that once stabilization is beginning to take hold, the focus should increasingly shift to reforms to foster sustained and inclusive growth and strengthen key institutions.