The International Monetary Fund (IMF) has criticised Pakistan’s performance towards economic improvement, saying that the reforms programme initiated in 2008 has moved backwards.
“Structural reforms have been retarded or reversed in 2010 and 2011,” the IMF said in a note to loan programme just ahead of Pakistan authorities visit to Washington to hold talks with the fund for resumption of repayment.
The IMF granted a 34-month $11.3 billion standby arrangement approved on November 24, 2008, augmented on August 7, 2009 and extended by nine months in December 2010.
The IMF board completed fourth review of the programme on May 14, 2010. Since then no tranche has been approved for Pakistan as it failed to meet the IMF conditions.
"Reform has been delayed and its scope has been far narrower than earlier envisaged,” the IMF said. “Moreover, very little progress has been made in reforms in the electricity sector and commodity operations, which are urgently needed to eliminate financial losses that impose a burden on the public finance and pose a threat to the macroeconomic stability,” it added.
The IMF also said that the legislation needed to strengthen bank supervision and the central bank autonomy has not yet been enacted, strengthening of the social safety net is still not complete and the reform of petroleum pricing has been partially reversed in recent months.
The real GDP growth is unlikely to exceed 2.75 percent.
The IMF reminded Pakistan to make progress under the economic reforms need to be reinvigorated. “They are needed to strengthen public finance and improve financial intermediation and to raise economic confidence to stimulate higher savings, investment, growth and employment,” it added.
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