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Pakistan faces risks if economic reforms slip: IMF

WASHINGTON: Pakistan faces risks from not fully reforming its economy as part of a $6.8 billion IMF loan program, though the government is trying to address policy shortfalls, IMF staff said in a report released on Monday.

The International Monetary Fund’s board last week signed off on an additional $1.05 billion installment under the loan program, suggesting the South Asian country was broadly on track with conditions.

But in a detailed report prepared ahead of the board meeting, IMF staff said the government continued to borrow too much from the central bank and collect too little in taxes. Pakistan also failed to pass a key law on central bank independence and anti-money laundering, among other missed targets.

“Any slippages in implementing key policy reforms could … damage growth prospects and undermine progress in macroeconomic stabilization,” IMF staff wrote in the report.

The IMF staff said recent floods and security and political concerns also remain key risks, though their impact should be offset by declining oil prices. The IMF kept its forecast for economic growth unchanged at around 4 percent for the current fiscal year, which ends on June 30, 2015. -Reuters

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