## IMF Staff Completes Article IV Mission to Pakistan

_IMF News, April 5, 2017_

## Source details

**Canonical URL:** [IMF Staff Completes Article IV Mission to Pakistan](https://www.imf.org/en/news/articles/2017/04/05/pr17117-pakistan-imf-staff-completes-article-iv-mission)

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## Bibliographic details
- Published: April 5, 2017

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### Mission summary and context
- Press Release No. 17/117; April 5, 2017.
- An IMF staff team, led by Harald Finger, visited Dubai during March 28–April 5, 2017 to conduct discussions with the Pakistani authorities on the 2017 Article IV Consultation.
- End-of-Mission press releases convey preliminary findings after a visit; the views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

### Main findings and outlook
- After three years of reforms, Pakistan has strengthened its macroeconomic resilience and economic outlook, providing an opportunity to build on recent progress with structural reforms and set the economy on a higher growth path.
- The mission expects:
  - economic growth to reach 5 percent in FY2016/17 helped by improving global economic conditions, rising investment related to the China-Pakistan Economic Corridor (CPEC), and recovering agriculture.
  - the current account deficit to reach 2.9 percent of GDP in FY2016/17 owing to a higher trade balance—in part reflecting increased imports of capital goods and energy—and stagnant remittances.
  - average headline inflation to be contained at 4.3 percent.
  - over the medium term, growth could accelerate to about 6 percent on the back of stepped-up CPEC and other investments, improved energy supply, and continued structural reforms.
- Risks and constraints identified:
  - slower-than-expected growth of large-scale manufacturing and stagnant exports are weighing on growth prospects.
  - challenges in the fiscal, external, and energy sectors could affect the hard-won stability gains.

### Policy recommendations and priorities
- Fiscal policy:
  - Stronger fiscal consolidation efforts will be needed to make up for the lower-than-expected revenue in the first half of this year and achieve a further deficit reduction next year.
- External sector:
  - Greater exchange rate flexibility and efforts to improve export sector productivity are needed to address the widening trade deficit and strengthen the economy’s ability to absorb medium-term CPEC-related and other capital outflows.
- Energy sector:
  - Bringing the power distribution sector to full cost recovery will be critical to ensure long-term success of new energy initiatives and minimize fiscal costs.
- Monetary and financial policies:
  - Alongside the above, monetary policy needs to remain prudent.
  - Promote financial inclusion and deepening.
- Structural reforms and social policy:
  - Maintain momentum with growth-enhancing structural reforms and expand social safety nets.
  - Restructure and seek private sector participation in loss-making public enterprises.
  - Improve the business climate.

### Engagement and acknowledgements
- The staff team met with Finance Minister Ishaq Dar, State Bank of Pakistan (SBP) Governor Ashraf Wathra, and other senior officials.
- The team thanks the authorities and technical staff for their cooperation and productive discussions, and reaffirms the IMF’s support of Pakistan’s economic reform program.

*IMF Press Release No. 17/117; April 5, 2017.*

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## Content in this bundle

- [Pr17117fa (PDF)](/external/lang/farsi/np/sec/pr/2017/pr17117fa.pdf){rel="external" type="application/pdf"}

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## References

- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2017/04/05/pr17117-pakistan-imf-staff-completes-article-iv-mission_