The IMF board led by Deputy Managing Director and Acting Chair, Mitsuhiro Furusawa, met in Washington yesterday and completed the 12th and final review of a three-year extended fund facility for Pakistan, granted in 2013 with an approval of $6.15 billion loan.
The IMF Director said in a statement, “Significant challenges remain for Pakistan in the post-programme period, and the authorities’ commitment to continue implementing strong policies to reinforce macroeconomic stability gains and advance growth supporting reforms is to be commended.”
Mr Furusawa said fund’s supported programmes helped Pakistan restore macroeconomic stability, reduce vulnerabilities, and make progress while tackling structural challenges.
The meeting also noted that economic growth improved in Pakistan.
“External buffers have been bolstered, financial sector resilience has been reinforced, and the fiscal deficit has been reduced, while social safety nets have been strengthened,” he continued in his statement.
The IMF Director said Pakistan’s tax policy and administration reforms supported revenue mobilisation, adding that steps were taken to strengthen the State Bank of Pakistan’s (SBP) autonomy.
“Energy sector reforms allowed reduction in power outages, energy subsidies, and accumulation of power sector arrears. A countrywide strategy to improve the business climate was adopted,” Mr Furusawa said.
He said, “Further accumulating international reserves in the context of sufficient exchange rate flexibility will help strengthen confidence and competitiveness, while maintaining a prudent monetary policy stance will be key to support low inflation and macroeconomic stability.”
“Moving forward with major structural reforms is pivotal to foster higher and more inclusive growth,” Mr Furusawa said and added that restructuring and attracting private sector participation in public enterprises was necessary for Pakistan to ensure financial viability and reducing fiscal costs.
The IMF would continue its engagement with Pakistan through policy dialogues in the context of regular consultations and post programme monitoring, maintained the Executive Board.