IMF stresses need for strict measures to cure ailing economy

ISLAMABAD: The International Monetary Fund (IMF) has suggested to the federal government to take stringent fiscal and monetary measures to address the economic challenges facing the country.  

A delegation of the IMF, which had arrived on a week-long visit in Islamabad to assess the country’s current economic situation and suggest corrective measures to put the economy back on a strong footing, issued an assessment report on the conclusion of its visit.

The delegation comprised of Mr. Harald Finger, Advisor & Team Leader; Ms. Terresa Dabansanche, Resident Representative IMF Islamabad, Mr. Ricardo Llaudes, Senior Economist, Washington DC and Ms. Hiba Zaidi, Senior Research Associate.

In the assessment report, the Fund observed that the new government’s economic policy is heading in the right direction.

It said the government will have to take strict measures to tackle the issues such as higher fiscal deficit, and extremely low foreign currency reserves.

The IMF said a hike in the global prices of crude oil will lead to a surge in inflation in the country.

It lauded the government’s decision to weaken the currency and stressed that the losses being incurred by state institutions needed to be cut down.

The Fund termed the previous measures such as the overvalued exchange rate, low interest rate and lenient monetary policy, as major problems ailing the economy.

Earlier, Finance Minister Asad Umar had categorically denied plans of seeking financial assistance from the International Monetary Fund (IMF) as of yet.

Addressing to the Chambers of Commerce Islamabad recently, the federal minister informed that government does not intend on taking any loans from the IMF until now. Commenting on the ongoing talks with the IMF, Umar said, “They are part of routine.”

“However, if we need to approach IMF for a bailout then the talks that are taking place right now will form the basis for it,” the Minister added.

He announced to bring comprehensive reforms in the Federal Board of Revenue (FBR), apprising that the tax policy board will be detached from the FBR.