Daily Times

The International Monetary Fund (IMF) Friday said Pakistan’s current account is adjusting more rapidly than anticipated besides other key areas which are also showing significant progress.

“Pakistan’s economic program is off to a promising start, but decisive implementation is critical to pave the way for stronger and sustainable growth,” a statement issued at the end of visit of the IMF mission led by Ernesto Ramirez Rigo said.

The mission visited Islamabad and Karachi from September 16 to 20 to take stock of economic developments since the start of the extended fund facility (EFF) and discussed progress in the implementation of economic policies. A full mission for the first review under the EFF is planned for late-October, the statement added.

“While the 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 to control inflation, and the SBP has improved its foreign exchange buffers,” Ernesto Ramirez Rigo said.

“There has been a significant improvement in tax revenue collections, with taxes showing double-digit growth net of exporter refunds. Moreover, the FBR is undertaking significant steps to improve tax administration and its interface with taxpayers,” he said, adding that the social spending measures in the program have also been implemented.

“The near-term macroeconomic outlook is broadly unchanged from the time of the program approval, with growth projected at 2.4 percent in FY2019/20, inflation expected to decline in the coming months, and the current account adjusting more rapidly than anticipated,” he said. “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. “In order to complete the first review, an IMF staff team plans to return to Pakistan in late-October to assess the end-September program targets,” he concluded.

Meanwhile, the IMF delegation met Federal Minister for Power Omar Ayub Khan here and discussed the power sector performance.

Omar Ayub informed the delegation regarding historic achievements by the Power Division in record recoveries and reduction in line losses, said a press release. He said the circular debt has shown considerable reduction in its growth. “It was growing with volume of Rs 38 billion per month and in eight months, its growth at the end of last financial year has reduced to Rs 26 billion per month,” the minister said. “In July 2019, the results were even encouraging as the growth was further arrested to Rs 18 billion per month,” he added.

The minister said a comprehensive campaign against power theft and defaulters by the Power Division is yielding results. He also appraised the delegation of the technical and system improvement measures undertaken by the Power Division in the power sector.

Ernesto Ramirez Rigo appreciated the efforts by the Power Division in meeting its targets. He also appreciated the efforts of Power Division in formulating the new renewable energy policy. He said that power is an integral part of the IMF programm.

He said that power sector performance is encouraging as they had a detailed discussion with various stakeholders. He also appreciated the shift toward utilization of indigenous resources leading towards reducing the prices of electricity in the country that will ultimately benefit all walks of life.