Economic activity remains stabilised, Pakistan made ‘considerable progress’ in last few months: IMF

The International Monetary Fund (IMF) mission that visited Pakistan to review the government’s performance on Friday concluded that Pakistan made “considerable progress” over the past couple of months and that “economic activity remains stabilised”.

In its concluding statement, the IMF delegation chief Mr Ernesto Ramirez showered praise on the government’s “sound economic policies”. He said Pakistan’s current account deficit had declined due to the real exchange rate “that is now broadly in line with fundamentals”.

Ramirez said that international reserves of the country keep on building at a pace faster than anticipated  and observed that inflation will continue to see a downward trend  “as the pass-through of exchange rate depreciation has been absorbed and supply-side constraints appear to be temporary”.

“Fiscal performance in the first half of the fiscal year remained strong, with the general government registering a primary surplus of 0.7 percent of GDP on the back of strong domestic tax revenue growth. Development and social spending have been accelerated,” concluded Ramirez.

An IMF delegation arrived in Pakistan earlier during the month to hold talks with the government and review its economic performance.

The delegation will submit a report to the IMF mission, based on which it would be decided as to whether to approve a tranche worth $460 million of the $6-billion three-year bailout package agreed upon back in July. Islamabad had earlier received $1 billion of the total amount.

Among the various conditions set by the global monetary body was also a review of Pakistan’s efforts to remove itself from the Financial Action Task Force’s (FATF) grey list, which the country will remain in till at least February 2020.