ISLAMABAD: The International Monetary Fund (IMF) on Saturday appeared concerned and worried about macro-economic indicators of Pakistan, saying the country is facing long and near-term economic challenges, including those in relation to budgetary side.
Speaking at a news conference at the conclusion of a day-long in-camera seminar on "Revival of Pakistan's Economy", here, Adnan Mazarei, Assistant Director of IMF for the Middle East and Central Asia said that near-term challenges included pressure on revenue and expenditure sides, debt servicing and energy crisis. A glimpse of Article-IV consultations was made available at the media talk where both Mazarei and Finance Minister Dr Abdul Hafeez Sheikh expressed divergent views about current state of country's economy. In one such view, the Finance Minister anticipated a positive growth on external account while the Fund expert expected a decline.
According to Mazarei, on long-term basis the country has to put in place safe and transparent regulations to attract investment, resolve energy crisis and make investment in human resource development to move towards sustainable growth. He was of the view that the country has to address structural and management issues in the energy sector to improve its performance as price changes would not serve the purpose.
In reply to a question about external account position, he said: "current fiscal year would not be as good for the country as was the last year in terms of external account position due to a difficult global situation." Mazarei suggested that Pakistan need to address fiscal imbalances by moving towards an equitable tax system to broaden the tax base. Moreover, he added, political consequences are also having a negative impact on the economy with no one ready to pay taxes, although everyone wants an honest government that could utilise taxes for their betterment.
The IMF representative suggested Pakistan to move on to inclusive growth, employment generation, better distribution of resources to reduce the poverty rate and benefit people. Mazarei also enumerated challenges on fiscal side with the fiscal decentralisation the passage of 18th Constitutional Amendment and the 7th NFC Award. According to him, these two developments have brought about considerable structural changes on fiscal side. He said that talks with the economic team during the Article-IV consultations were held in a very constructive and positive atmosphere.
Finance Minister Dr Abdul Hafeez Sheikh said the role of the government representatives during the day-long seminar is to listen to economists, business community and development partners and share with them the steps taken towards economic reforms. According to him, the economic team has held very constructive discussion with the IMF during Article-IV consultations in Dubai on economic reforms and about way forward policy mix to move on to high growth path.
Hafeez Sheikh said that the first four months of the current fiscal year were very positive with exports soaring to over 6 billion dollars which were 23% more than the same period of previous year and remittances reached 4.2 billion dollars mark, 23% up compared to the same period of last year. The Minister said the growth in taxes during the first four month was 28% with total collection of Rs 509 billion compared to the same period of last year.
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