The Interna-tional Monetary Fund (IMF) has stated that "decisive" implementation of the economic reforms program of Extended Fund Facility (EFF) is critical to pave way for stronger and sustainable growth. An International Monetary Fund (IMF) mission, led by Ernesto Ramirez Rigo, visited Islamabad and Karachi during September 16-20, 2019 to take stock of economic developments since the start of the Extended Fund Facility (EFF) and discuss progress on the implementation of economic policies.
At the conclusions of staff visit, the IMF mission chief stated "the near-term macroeconomic outlook is broadly unchanged from the time of the program approval, with growth projected at 2.4 percent in fiscal year 2019-20, inflation expected to decline in the coming months, and the current account adjusting more rapidly than anticipated.
However, domestic and international risks remain, and structural economic challenges persist. In this context, the authorities need to press ahead with their reform agenda." Pakistan's economic program is off to a promising start, but decisive implementation is critical to pave the way for stronger and sustainable growth.
The IMF mission will return to Pakistan in late-October to conduct the first review under the EFF. "While the authorities' economic reform program 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 control inflation, and the SBP has improved its foreign exchange buffers.
"There has been a significant improvement in tax revenue collection, with taxes showing double-digit growth net of exporters' refunds. Moreover, the FBR is undertaking significant steps to improve tax administration and its interface with taxpayers."
The IMF further stated that staff and the authorities have analyzed the worse than expected fiscal results of fiscal year 2018-19, which were partially the result of one-off factors and should not jeopardize the ambitious fiscal targets for fiscal year 2019-20. Importantly, the social spending measures in the program have been implemented.