IMF Highlights Pakistan’s Reform Package as Key to FDI, Fiscal Stability, and SOE Revitalization
According to Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), Pakistan’s new reform package aims to enhance fiscal sustainability by tackling long-standing fiscal issues. Azour, speaking at a recent briefing, noted that the reform agenda is designed to reinforce macroeconomic stability and reduce financial risks while addressing critical sectors like energy and state-owned enterprises (SOEs) and fostering a more conducive business climate.
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The IMF projects that Pakistan’s economy will grow at a rate of 2.4% this year, an improvement from the negative 0.2% seen last year, with expectations of 3.2% growth in 2025. Inflation is also anticipated to decrease from 29% last year to 12.6% this year and is projected to further decline to 10.6% next year.
Azour emphasized that a primary objective of Pakistan’s reform package is fiscal sustainability, targeting deficit reduction by increasing revenue while enhancing revenue quality by addressing inefficiencies in tax collection. Reforming SOEs is also a priority, with goals to create a more level playing field, boost private sector participation, and enhance foreign direct investment (FDI) inflows, ultimately transitioning Pakistan towards a more export-oriented economy.
Monetary policy support is also critical, addressing inflation and alleviating constraints on capital flows and exchange transfers. This holistic approach, he noted, fosters predictability while alleviating current account pressures.
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This comprehensive reform strategy not only promotes macroeconomic stability and reduces financing risks but also aims to revamp key sectors, attract greater FDI, improve the business environment, and position Pakistan’s economy for export-led growth.
