The International Monetary Fund has urged Pakistan to bring its currentaccount deficit under control, an official said, as the country’s newgovernment seeks an increase in the size and duration of the current IMFprogramme.
Pakistan’s current account deficit ballooned to $13.2 billion in the ninemonths of its fiscal year from a gap of $275 million a year earlier on theback of soaring oil import costs, official data showed.
Rating agency Moody’s expects the deficit to widen to 5-6% of the grossdomestic product in the current fiscal year ending June 30, up from itsearlier 4% projection, putting greater pressure on Pakistan’s foreignreserves.
Jihad Azour, director of IMF’s Middle East and Central Asia Department,told Reuters the fund’s team will assess the policy priorities of the newgovernment and the economic impact in the context of the war in Ukraine.
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“But of course, we have been over the last few months highlighting theimportance of maintaining the current account situation under controlreduce the current account deficit.”
He did not elaborate on the policy actions, but the IMF has said earlier acontinued commitment to a market-determined exchange rate and a prudentmacroeconomic policy mix will help reduce the deficit.
