IMF says economic activity has stabilised in Pakistan

F.P. Report

ISLAMABAD: International Monetary Fund (IMF) mission has acknowledged that economic activity stabilised in Pakistan and the country made considerable progress in advancing reforms and effective economic policies besides meeting all end-December performance criteria.

The IMF mission released a declaration after concluding dialogues with Pakistan today which stated that the government made steadfast progress on program implementation which will pave the way for its executive board’s consideration of the review.

It also read that development and social spending have been accelerated in implementing the programme besides the completion of structural benchmarks.

Ramirez Rigo, who led the IMF delegation during talks with the Pakistani officials in Islamabad on the second review of the authorities’ economic reform program, made the statement, “The IMF staff team had constructive and productive discussions with the Pakistani authorities and commended them on the considerable progress made during the last few months in advancing reforms and continuing with sound economic policies.”

“The mission and the authorities made significant progress in the discussions on policies and reforms. In the coming days progress will continue to pave the way for the IMF Executive Board’s consideration of the review.”

“The macroeconomic outlook remains broadly as expected at the time of the first review. Economic activity has stabilized and remains on the path of gradual recovery.”

“The current account deficit has declined, helped by the real exchange rate that is now broadly in line with fundamentals, while international reserves continue to rebuild at a pace considerably faster than anticipated.”

Mr Rigo added, “Inflation should start to see a declining trend as the pass-through of exchange rate depreciation has been absorbed and supply-side constraints appear to be temporary.”

“Fiscal performance in the first half of the fiscal year remained strong, with the general government registering a primary surplus of 0.7 percent of GDP on the back of strong domestic tax revenue growth. Development and social spending have been accelerated,” the statement said.

It is pertinent to mention here that an International Monetary Fund (IMF) mission, led by Ernesto Ramirez Rigo, had visited Islamabad during February 3-13, to hold discussions on the second review of the authorities’ economic reform program supported under the Extended Fund Facility (EFF) arrangement.