IMF Staff Country Reports

This paper discusses Pakistan’s First Review under the Stand-By Arrangement, Requests for Waivers of Applicability of Performance Criteria, Modification of Performance Criteria, and for Rephasing of Access. Economic activity has stabilized in Pakistan, although the outlook remains challenging and dependent on the implementation of sound policies. Continued timely and consistent implementation of program policies remains critical, with no room for slippage. This requires strict adherence to fiscal targets while protecting social spending, a market-determined exchange rate to absorb external shocks, and further progress on structural reforms to support stronger and more inclusive growth. Timely and consistent implementation of program policies remains critical, with no room for slippage. Strict adherence to the fiscal targets, while protecting development needs and strengthening the social safety net, is essential to alleviate pressures and place debt on a downward path. Reforms of state-owned enterprises and of the governance framework, including safeguards for the newly created Sovereign Wealth Fund, should be accelerated to strengthen the business environment, investment, and job creation.