IMF: Pakistan has a ‘moment of opportunity’
islamabad — Pakistan was praised on Monday by IMF chief Christine Lagarde for emerging from an economic crisis and stabilising its economy after the country completed its bailout programme.
The IMF released the last installment of a $6.6 billion three-year economic bailout package to Pakistan last month.
Lagarde, on her first visit to Pakistan, congratulated Prime Minister Nawaz Sharif “on successfully completing the IMF programme which has helped Pakistan restore its macroeconomic stability”, according to a statement from Sharif ’s office.
“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,” Lagarde said, according to the statement.
Lagarde added the completion of IMF programme reflected “very positively” on Pakistan and the country is “certainly out of economic crisis”.
She noted that economic growth has gradually increased, the fiscal deficit has reduced while inflation has continuously declined in Pakistan. “She also appreciated the country’s strengthened social safety nets and tax policy and administration reforms,” the statement said. She urged Pakistan to seize a “moment of opportunity” to continue reforms and reduce public debt.
Pakistan last month received the last payment of a $6.7 billion bailout package that helped it stave off default in 2013. It marks the first time Pakistan has completed an IMF programme after abandoning 11 others in the past.
Lagarde praised the progress Pakistan has made in three years,
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 Christine Lagarde, IMF chief
from reducing costly subsidies, privatising some loss-making state firms and sharply increasing foreign reserves. She added that reforms must go further in order to generate enough jobs for the roughly two million Pakistanis who enter the workforce each year. Roughly one-third of Pakistanis live under the official poverty line, she said.
“Pakistan has reached what I call that moment of opportunity where it can embark on the next generation of reforms to generate higher and more inclusive growth and tap into the dynamism of emerging economies.”
Lagarde specified that the government must bring down public debt — which now stands at 65 per cent of GDP — spur exports and further expand tax collection, which is still about half of what Lagarde said was a “feasible amount”.
In an article published in Pakistan’s daily The News, Lagarde wrote that the country had embarked on an important transformation to join the ranks of emerging market economies.
“Its three-year economic reform programme, which the IMF supported, has delivered significant gains,” she wrote.
“The economy is now more resilient, and further steps have been set in motion to support higher, private sector-led, and inclusive growth.”
The IMF has forecast growth of five per cent for Pakistan for the year ending in June 2017, which would be the biggest economic expansion in nine years.
Still, economists forecast the country must grow at least six per cent just to keep pace with the rapidly expanding workforce in the country of 190 million people. — AFP, Reuters