Pakistan’s economy on a sound path, says IMF chief after Executive Board approval

International Monetary Fund (IMF) Managing Director (MD) Kristalina Georgieva has said that Pakistan’s economy “is on a sound path” amid the reforms undertaken by the government.

“We have completed the review of the programme very successfully,” said the IMF chief.

“I want to congratulate the government of Pakistan and the people of Pakistan for moving forward with the home-defined, Pakistan-owned reforms and they are bringing fruits.

“Growth is up, inflation is down and the economy is on a sound path,” she added.

The remarks came during Georgieva’s meeting with Prime Minister Shehbaz Sharif in New York, which was after the IMF Executive Board on Wednesday approved Pakistan’s 37-month Extended Fund Facility (EFF) arrangement of about $7 billion.

The Pakistani authorities and the IMF team had earlier reached a staff-level agreement on the EFF on July 12. The programme aimed at supporting the authorities’ efforts to cement macroeconomic stability and create conditions for a stronger, more inclusive, and resilient growth.

When questioned if the reforms benefit Pakistan’s poorer populace, Georgieva stated: “I do sense this [trickle-down effect] is happening, the government aims to collect taxes from the rich and is strengthening the Benazir social program to support the poor.”

Earlier, the Asian Development Bank (ADB) on Wednesday said that the reform agenda agreed under the IMF is likely to accelerate growth in Pakistan.

As per the Asian Development Outlook report for September, a comprehensive economic reform programme supported by the IMF is projected to increase growth, expected to grow by a moderate 2.8%, and reduce inflation in FY2025.

“Private investment should rebound on more favourable macroeconomic conditions, including easier access to foreign exchange. This will also benefit manufacturing and services,” the ADB’s outlook noted.