The IMF has projected 4.5 percent growth in the Pakistani economy during the current fiscal year, thanks to macroeconomic stability, improvement in electricity supply and fall in the petroleum prices in the international market. According to Harald Finger, an official of the International Monetary Fund (IMF), the economy of Pakistan is improving and inflation has been dropped to 1.8 percent in July. Pakistan is seeks IMF waiver on two counts – the government missed the target of fiscal deficit by 0.4 percent against the budgetary target of 4.9 percent during the last fiscal year. A statement issued by the Finance Ministry says that the government achieved a fiscal deficit of 5.3 percent of the GDP for 2014-15, but was unable to achieve Rs 1,865 billion ceiling target on net budgetary borrowing from the State Bank by the end of June this year.
In a press release, the IMF says that Pakistan continued to implement the economic programme. The country has missed some targets but achieved those with a significant margin which were related to monetary policy. At the end of June 2015, the government missed the performance criteria on the budget deficit and borrowing from the SBP with a small margin. Pakistan needs to enhance exports, attract local and foreign investment and create jobs to curtail unemployment. Structural changes in the system and reforms should be the priority areas, but the government is facing challenges in its efforts to enhance tax net. The government also needs to restructure loss-making public enterprises through strategic partnerships with the private sector. According to the IMF, the government should advance the energy sector reforms, improve business environment and expand coverage of the vulnerable segment of society. A decisive action, involving the official and private partnership will help strengthen the economy as Pakistan has the potential to emerge as dynamic and progressive economy in the world.
No doubt the country’s economy is improving despite all odds, but the IMF conditions are pushing the life of citizens from bad to worse. According to Finance Minister Ishaq Dar, Pakistan and the IMF have completed negotiations on the eighth review, which will lead to release of ninth tranche of over $500 million under the $6.64 billion Extended Fund Facility program. The talks between Pakistan and the donor agency concluded in Dubai a couple of days ago. Though the macroeconomic situation has been improved during the last two years, all hopes are on the construction of China Pakistan Economic Corridor (CPEC) to further boost economic activities. The problem lies in the management. The country’s economy is playing in the hands of an accountant whereas it needs a financial manager.
