Pakistan: Request for an Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Pakistan

IMF Staff Country Reports, July 8, 2019

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Canonical URL: Pakistan: Request for an Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Pakistan

Pakistan’s economy is at a critical juncture.
Misaligned economic policies in recent years included:
- large fiscal deficits
- loose monetary policy
- defense of an overvalued exchange rate
These policies:
- fueled consumption and short-term growth
- steadily eroded macroeconomic buffers
- increased external and public debt
- depleted international reserves
Without urgent policy action, economic and financial stability could be at risk, and growth prospects will be insufficient to meet the needs of a rapidly growing population.

Structural weaknesses remained largely unaddressed:
- a chronically weak tax administration
- a difficult business environment
- inefficient and loss making SOEs
- low labor productivity amid a large informal economy

Policy mix described above led to:
- erosion of macroeconomic buffers
- increased external and public debt
- depleted international reserves
Identified subject areas in the report include:
- Budget planning and preparation
- Expenditure
- External debt
- Public debt
- Public financial management (PFM)
- Revenue administration