IMF mission concludes visit; staff acknowledges progress in key areas – Pakistan

An International Monitoring Fund (IMF) mission, led by its head of missions from Pakistan, the Middle East and Central Asia, Ernesto Ramírez Rigo, concluded a five-day visit to Pakistan on Friday, highlighting progress in multiple key areas in one Press release.

According to a press release published on the IMF website, the country's economic program has had a promising start, but the decisive implementation of the reforms is essential to pave the way for stronger and more sustainable growth.

The IMF mission visited Islamabad and Karachi from September 16 to 20 to take stock of economic developments since the beginning of the Extended Fund (FEP) and analyze progress in the implementation of economic policies.

The head of the mission, Ernesto Ramírez Rigo, commented after concluding the visit: “While the authorities' economic reform program is still in its early stages, progress has been made in some key areas. The transition to an exchange rate determined by the market has begun to offer positive results in the external balance, the volatility of the exchange rate has decreased, monetary policy is helping to control inflation and the State Bank of Pakistan (SBP) has Improved your foreign exchange reserves. "

He also said: "There has been a significant improvement in the collection of tax revenues, with taxes showing a two-digit net growth in exporter refunds. In addition, the Federal Revenue Board (FBR) is taking important steps to improve the tax administration and its interface with taxpayers.

"The staff and the authorities analyzed the worse than expected fiscal results of the 2018-19 fiscal year, which were partly the result of unique factors and should not jeopardize the ambitious fiscal objectives for the 2019-20 fiscal year," he said. . "It is important to note that the social spending measures in the program have been implemented."

Speaking about the economic outlook for the country, the head of the mission said: "The short-term macroeconomic outlook has not changed since the moment of program approval, with a projected growth of 2.4 percent in fiscal year 2019-2019. , and inflation is expected to decrease in the coming months, and the current account adjusts faster than expected. "

"However, national and international risks persist and structural economic challenges persist. In this context, the authorities must move forward with their reform agenda," he warned.

"To complete the first review, a team of IMF technical staff plans to return to Pakistan at the end of October to evaluate the objectives of the program at the end of September," he added.

The IMF head of mission visits the energy minister and analyzes the reforms

Earlier in the day, Rigo called Federal Energy Minister Omar Ayub Khan to his office and reportedly expressed satisfaction with the performance of the electricity sector, calling it encouraging.

According to another press release, issued by the power division, Rigo thanked the efforts made by the division to achieve its objectives. He also appreciated the efforts to formulate the new renewable energy policy, the statement.

The IMF head of mission said that the reform of the electricity sector is an integral part of the IMF program. Appreciates the shift towards the use of indigenous resources that leads to the reduction of electricity prices in the country.

Development, he said, will ultimately benefit all areas of life.

The minister also informed the IMF delegation of the achievements made by the division in relation to "record recoveries" and the reduction of line losses. He said that due to the concerted efforts of the power division, the circular debt had shown a considerable reduction in growth.

According to the statement, the circular debt had been growing at a rate of Rs38 billion per month, while its growth at the end of the last financial year was reduced to Rs26bn per month.

In July 2019, the results were even more encouraging as growth stopped further at Rs18bn per month, the minister said; and added that a comprehensive campaign against theft of power and the delinquent was giving results.

Omar Ayub Khan also informed the delegation about the technical and system improvement measures undertaken by the power division. He also said that 80 percent of the total feeders in the country are now free of charge management.

He also informed the delegation of the new policy under which the government aims to increase the participation of indigenous resources in power generation and reduce electricity prices for consumers, as well as reduce dependence on imported fuels.

"We intend to increase the participation of indigenous resources up to 75pc," he said.