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Pakistan

Web Desk
February 14, 2020

Pakistan made 'considerable progress' during last few months: IMF

Pakistan

Web Desk
Fri, Feb 14, 2020
PHOTO BY: AFP

The International Monetary Fund (IMF) on Friday said that Pakistan had made "considerable progress during the last few months" and said that economic activity remains stabilised and is on the path to "gradual recovery". 

A press release by the international money lender at the conclusion of the IMF's mission's visit to Pakistan was released. The IMF credited Pakistan with  meeting the all-end December performance criteria  and said that structural benchmarks had been created. 

Mr  Ernesto Ramirez Rigo, who led the IMF delegation, said that Pakistan's current account deficit had declined due to the real exchange rate "that is now broadly in line with fundamentals". 

Ramirez said that international reserves of the country keep on building at a pace faster than anticipated  and observed that inflation will continue to see a downward 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," concluded Ramirez. 

An IMF delegation arrived in Pakistan earlier during the month to hold talks with the government and review its economic performance.

The delegation will submit a report to the IMF mission, based on which it would be decided as to whether to approve a tranche worth $460 million of the $6-billion three-year bailout package agreed upon back in July. Islamabad had earlier received $1 billion of the total amount.

Among the various conditions set by the global monetary body was also a review of Pakistan's efforts to remove itself from the Financial Action Task Force's (FATF) grey list, which the country will remain in till at least February 2020.

Earlier this month, the intergovernmental organisation's president had said Pakistan made progress towards money-laundering and terror-financing.

Pakistan, IMF agree not to introduce mini-budget, tax rate hike till June

Geo News reported on Wednesday that Pakistan and the IMF had agreed not to introduce a mini-budget or increase the tax rate in the country till June. The two sides had agreed that neither would a mini-budget be introduced nor would there be a reduction in the tax collection target

The government has come under fire from critics and even some of its own members for the rising inflation across the country. Opposition parties, such as the PPP, have slammed the PTI-led government for allegedly compromising Pakistan's economic independence and negotiating a bad deal with the IMF.

The international money lender has advised Pakistan to bump up its non-tax income by Rs400 billion to boost revenue collection, according to sources. Pakistan will also ensure implementation of the privatisation road map and not jack up the sales tax to 18 percent; the rate would, for now, be maintained at 17 percent.