NewsJanuary 27, 2018
IMF for broader political consensus on structural reforms in Pakistan
ISLAMABAD: The IMF’s Resident chief Tokhir Mirzoev said on Thursday that reaching a broader political consensus on the needed structural reforms will be key to implementation in Pakistan.“Reaching a broad political consensus on the needed structural reforms will be key to their implementation”, the IMF’s Resident chief in Pakistan Tokhir Mirzoev said when The News sought his comments on required future roadmap for the country to overcome the crisis on economic front here on Thursday.
To another query regarding the challenges on front of twin deficits including the current account deficit and budget deficit, he replied, “This year has been certainly challenging for policymakers due to increased external and fiscal imbalances. The Pakistani authorities have already taken several measures to contain these imbalances. It will be important to continue to refocus policies to preserve macroeconomic stability in the period ahead”.
The consensus among the mainstream political parties is quite important for undertaking privatising cash bleeding state-owned entities such as PIA, Pakistan Steel Mills (PSM) and others and policymakers including the leading political parties will have to take a conscious decision whether they will continue with the baggage of accumulated losses of $3 to $4 billion for national flag carrier or political parties will shun their differences for gaining petty political gains and evolve a consensus to privatise these loss-making entities.
The IMF is revising its projections for Pakistan’s twin deficits, including the current account deficit and budget deficit for the current fiscal year, which will be shared with the Fund’sExecutive Board by end February or early March this year, said the sources.
The IMF and Pakistani side concluded parleys under the Post Program Monitoring (PPM) in December 2017 after completion of the IMF Extended Fund Facility (EFF) in September 2016. During the talks on PPM held at Islamabad, both the IMF and Pakistani side agreed upon many macroeconomic projections but some of them are still being finalised after getting the latest December numbers, including related to the current account deficit and budget deficit.
Pakistan’s current account deficit had already touched $7.4 billion in the first six months of the current fiscal year. The country’s budget makers had estimated that the CAD would be standing at $10 billion for the current fiscal year compared to $12.4 billion for the last fiscal year. Now the officials of the Finance Ministry conceded that the CAD projection was revised upward and now would be standing at $14 billion.
When contacted, former finance minister Dr Hafiz Pasha said that the current account deficit would be standing at $16 billion for the current fiscal year after witnessing over $7 billion in the first half of the current fiscal year.
On the budget deficit, the government is finalising its fiscal details for the first six months and they should be made public soon. The government has already increased upward its projections for the budget deficit to over 5 percent of GDP against the initial assessment of 4.2 percent of GDP for the current financial year. Keeping the budget deficit below 6 percent of GDP will be a major challenge for the government just ahead of the upcoming general elections after a few months, the official admitted.
Courtesy www.thenews.com.pk
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