*ISLAMABAD:* *The International Monetary Fund (IMF) has urged Pakistan totake immediate counter-acting measures to minimize the increasing risksconcerning the country’s economic and financial outlook.*
In a statement released almost one and a half day after the conclusion ofits Executive Board meeting held with Pakistan, the IMF executive boardasked the centre to refocus on near-term policies to preserve macroeconomicstability after widening external and fiscal imbalances, besides reductionin foreign exchange reserves.
The board also asked the government to strengthen the fiscal discipline.The projections of IMF over the current account and budget deficits putformer finance minister Ishaq Dar’s all claims under question at time ofannouncing the government’s fifth budget in June last year.
With its latest prediction, the IMF said in the statement that Pakistan’sofficial gross foreign currency reserves could slip to $12.1 billion –barely enough to finance 10 weeks of imports.
The board has predicted that the country’s budget deficit likely to hit 5.5percent of the GDP — almost Rs505bn or 1.4pc — higher than 4.1pc budgetedby the government.
With “rising external and fiscal financing needs and declining reserves,risks to Pakistan’s medium-term capacity to repay the Fund have increasedsince completion of the Extended Fund Facility (EFF) arrangement inSeptember 2016”, noted the IMF in its handout released Wednesday morning.
However, It said Pakistan’s near-term outlook for economic growth isbroadly favourable and real GDP growth is expected to grow by 5.6% infiscal year 2017-18, supported by improved power supply, investment relatedto the China-Pakistan Economic Corridor (CPEC), strong consumption growth,and ongoing recovery in agriculture.
The directors underlined the importance of accelerating structural reformsto reinforce macroeconomic stability, raise competitiveness and promotehigher and more inclusive growth.
Moreover, the board of IMF directors called for anti-money laundering andcounter-terrorism financing regimes in wake of recent setback at theFinancial Action Task Force.
The IMF directors have urged the country’s managers to further devalue thecurrency to minimize damages to the external sector, besides levying moretaxes to control the growing budget deficit.