December 13, 2019 (MLN): The policy reforms and measures mark a positive and significant turning point in Pakistan’s economic prospects for the population at large.
Pakistan’s economic reforms program is on right track, said by IMF director, Gerry Rice in a press briefing yesterday.
Back in May, the Pakistani authorities and the IMF team had reached a 39-month Extended Fund Arrangement (EFF) for $6 billion. This program aimed to support the Pakistani authorities’ strategy for stronger and more balanced growth by reducing domestic and external imbalances, improving the business environment, strengthening institutions, increasing transparency, and protecting social spending.
In November, IMF mission visited Pakistan to assess the effectiveness of fiscal institutions, such as how much budget information is made publicly available and whether governments have mechanisms in place to develop and implement medium-term budget goals.
Pakistan has shown the notable progress and reached a staff-level agreement on the first review under the EFF.
It is prudent to mention that the IMF is scheduled to hold a board meeting on December 19, 2019, to review Pakistan’s performance under the extended fund facility. Pakistan expects to receive around $450 million post a successful and positive review from the IMF.
However, according to the IMF’s press release, MENAP’s oil-importing countries including Pakistan do not have a mechanism for setting fiscal goals with strategies to achieve them over a multiyear period.
The overarching takeaway from the IMF’s analysis is clear: MENAP including Pakistan has significant room for improvement in strengthening their fiscal institutions.
In accordance with the press release, the quality of fiscal institutions is inextricably linked to the success, or failure, of fiscal policy, policymakers can make important strides as they work to make their countries more resilient and prosperous in the years ahead.
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