Pakistan's economic programme has seen progress in some key areas, but the decisive implementation of reforms remain critical for a stronger and sustainable growth for the cash-strapped country, the IMF said on Friday
An International Monitory Fund (IMF) mission led by its Pakistan, Middle East and Central Asia Mission Chief Ernesto Ramirez Rigo concluded a five-day visit to Pakistan.
A statement was issued at the end of the trip that reviewed the progress of implementation of reforms program as part of its USD 6 billion bailout package given in July.
Rigo highlighted the progress in multiple key areas in a press statement.
"While the authorities' economic reform programme is still in its early stages, there has been progress in some key areas. The transition to a market-determined exchange rate has started to deliver positive results on the external balance, exchange rate volatility has diminished, monetary policy is helping to control inflation, and the State Bank of Pakistan (SBP) has improved its foreign exchange buffers," he said.
He appreciated the improvement in the tax revenue which was a major concern of the IMF.
"There has been a significant improvement in tax revenue collections, with taxes showing double-digit growth net of exporters' refunds," he said.
Rigo also said the Federal Board of Revenue (FBR) was undertaking significant steps to improve tax administration and its interface with taxpayers.
He said the IMF staff and the authorities have analysed the worse than expected fiscal results of FY2018-19, which were partially the result of one-off factors and should not jeopardise the ambitious fiscal targets for FY2019-20.
"Importantly, the social spending measures in the programme have been implemented," he said.
Rigo said the near-term macroeconomic outlook was broadly unchanged from the time of the programme approval, with growth projected at 2.4 per cent in FY2019-20, inflation expected to decline in the coming months, and the current account adjusting more rapidly than anticipated.
The mission head said that there were also some issues.
"However, domestic and international risks remain, and structural economic challenges persist. In this context, the authorities need to press ahead with their reform agenda," he said.
The IMF mission visited Islamabad and Karachi from September 16-20 and met top officials.
The mission will come back in late October to assess the end-September program targets which will complete the first review by an IMF staff team.
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