IMF give thumbs-up on reforms vital to sustained growth: officials

ISLAMABAD: The International Monetary Fund (IMF) is expected to present encouraging views on Pakistan’s economy in its upcoming post program monitoring report – a likelihood that would augur well for external account in need of funds injection, officials said on Tuesday.

“It is expected that the IMF would use careful wording for conveying its message to targeted audience in a very guarded manner,” a well-placed finance ministry’s official said after a meeting between IMF’s Resident Representative in Pakistan Tokhir Mirzoev and Adviser to Prime Minister on Finance Miftah Ismail.

“If IMF grants good health certificate, it will help Islamabad in overcoming its looming crisis on external accounts,” the official said on condition of anonymity.

The upcoming post program monitoring (PPM) report on Pakistan’s economic health is considered very crucial and important as this would determine the fate of future lending, especially concessional loans, from the World Bank and Asian Development Bank.

Pakistan completed its three-year $6.4 billion extended fund arrangement loan program in September 2016.

The economic indicators improved in the past four years under the IMF’s reforms program with the economy having achieved 10-year high growth of 5.3 percent.

IMF, in its latest global economic report, said Pakistan’s growth is to pick up in 2018 and 2019.

Officials said IMF would table its PPM report on Pakistan before its Executive Board sometime in February and after getting approval it would be released.

Mirzoev and Ismail discussed possibility of holding upcoming Article IV consultations before the upcoming budget.

The government intends to unveil the next budget in May as its term under the constitutional requirement is likely to complete on June 4.

PM Adviser told The News that the Article IV consultation with the IMF is expected to complete before the upcoming budget.

The IMF holds Article IV consultation with all its member countries once in a year in which the Fund recommends steps to improve an economy.

IMF, after the Article IV Consultation in July last year, said Pakistan’s macroeconomic resilience was strengthened during the three-year extended fund facility-supported program, growth increased, fiscal deficit was reduced, and foreign currency reserves recovered.

“Following completion of the program, there has been progress in implementing staff’s policy recommendations, although policy implementation has weakened and macroeconomic vulnerabilities have begun to re-emerge: fiscal consolidation slowed, the current account deficit widened, and foreign exchange reserves declined,” the Fund said in an earlier statement.

IMF’s Mirzoev, who have accomplished his three-year term, said the PPM report is expected to be released next month.

The meeting discussed the current macroeconomic situation and the economy outlook.

The adviser said the present government’s concerted efforts led to macroeconomic stability and the country’s economy is moving steadily on the path of growth.

The economic data for the recent months showed increased economic activity, which is encouraging, he added.

Ismail said the measures taken by the government jacked up exports, which would help in reducing the trade deficit.

The adviser said the government would continue to pursue prudent fiscal policy to consolidate the gains of the past four years. He expressed the confidence that future would bring better opportunities for Pakistan.

Mirzoev apprised the adviser of the fund's discussions and assessments during the recent post program monitoring as well as the schedule of the next Article IV consultation.