Pakistan out of ‘economic crisis’, says IMF MD “YOU HAVE ACHIEVED A BETTER AND SOLID ECONOMIC POSITION IN A BRIEF PERIOD OF TWO YEARS”

SAYS PAKISTAN ACHIEVED BETTER ECONOMIC POSITION IN A BRIEF PERIOD OF TWO YEARS

INTERNATIONAL Monetary Fund (IMF) Managing Director Christine Lagarde, who is visiting the federal capital on her first official visit, said Pakistan was ‘out of an economic crisis’ during a meeting with Prime Minister Nawaz Sharif on Monday.

“Pakistan is now in a better fiscal position and certainly out of economic crisis,” she said, according to a statement issued by the Prime Minister’s Office.

Lagarde also congratulated the premier on successfully completing the IMF programme, the statement added.

“It is a fantastic step in your journey that you have achieved a better and solid economic position in a brief period of two years,” she told PM Nawaz.

Lagarde acknowledged the government for steering the country out of numerous challenges while achieving macroeconomic stability at the same time.

She said Pakistan’s fiscal deficit had reduced and inflation declined in the recent years, the PM House statement said.

IMF’s Lagarde also, the statement said, appreciated Pakistan’s strengthened social safety nets and tax policy and administration reforms.

Prime Minister Nawaz Sharif also lauded IMF’s support for helping Pakistan get close to achieving an economic recovery and macroeconomic stability.

“We are successfully delivering on the major challenges of terrorism, economy and power shortages that we inherited from the previous governments’, the Prime Minister said.

He added that “We have dismantled the terrorists’ networks and even presently 200,000 troops are deployed in the northern areas to completely eliminate the menace of terrorism from the country,” he said.

The prime minister told the IMF Chief that Pakistan lost over 24,000 precious human lives with a loss of $100 billion in the war against terrorism.

On Pakistan relations with Afghanistan, he emphasised that Islamabad was sincere in bringing stability in the war-hit region and added, “Peace and stability and Afghanistan would ensure peace in Pakistan and the region as well.”

The premier also outlined Pakistan’s future projects to address energy shortfall at the earliest and improving the country’s infrastructure and communication networks.

“We want to further reduce our expenditures, increase our exports and lower down the cost of production for our industrial and agriculture sectors,” PM Nawaz said.

He also mentioned that with the help of various new power projects, his government was aiming to eliminate loadshedding by 2018 from Pakistan.

“We are also committed to providing social protection to the poor and vulnerable people of our society for which our government has increased the budgetary allocation to BISP from Rs 40 to Rs 120 billion in the last three years. The poor families covered under this programme have been increased from 3 million to 5.6 million families,” the Prime Minister said.

HARD WORK, REFORMS NOW PAYING OFF: Meanwhile Lagarde, while addressing a seminar as the key note speaker on ‘Emerging Markets in the World Economy’ organised by the Ministry of Finance and State Bank of Pakistan, said that Pakistan’s hard work was paying off and the country could place itself among the emerging market economies.

She said that economic growth had gradually increased and the fiscal deficit had reduced while inflation had continuously declined in Pakistan. She also appreciated the country’s strengthened social safety nets, tax policy and administration reforms.

She however stressed for greater economic resilience, higher growth, quality of growth and belief in the global system. “This is a moment of opportunity for Pakistan, a country undergoing an economic transformation that can place it well among the ranks of emerging market economies,” she said.

Talking about the outcome of IMF programme, Lagarde said that costly and inefficient subsidies were reduced. “These subsidies disproportionately benefited the more affluent. And the accumulation of power sector arrears, also known as circular debt, has also significantly decreased. These are major achievements”.

“There have been equally important achievements on the budget revenue side. By closing tax loopholes and setting up a more targeted approach to widen the tax base, revenue collection improved by two and half percent of GDP over the past three years,” the IMF MD said.

Indeed, the hard work and reforms had started to pay off, Lagarde said, adding that Pakistan was recently upgraded from a frontier economy to an emerging market in the MSCI index. “This is an important signal given the changing global landscape, where economic dynamism has gradually been shifting from advanced to emerging market economies,” she added.

“The significant success achieved by Pakistan in raising a $1 billion in Sukuk on a competitive pricing is also a reflection of international investors’ confidence in what has been achieved,” she said.

According to Finance Minister Ishaq Dar, Pakistan’s economy continues to maintain its growth momentum above 4 percent for the third year in a row with real GDP growing at 4.71 percent in FY 2016 which is the highest in eight years. Inflation has been brought down to single digit at 2.86 percent in FY 2016, the lowest in decades.

Dar said the visit of the IMF MD was an acknowledgement of the economic reforms agenda undertaken by the government during the last three years during which Pakistan moved to the macro-economic stability from a position of instability which prevailed in 2013.