Pakistan's economy improving: IMF

Published: May 25, 2010

The IMF said that Pakistan's economy is doing better than the previous year.

LAHORE: The International Monetary Fund said on Tuesday that Pakistan’s economy is getting back on an even keel.

Pakistan was suffering from a balance of payments crisis 18 months ago and remains vulnerable to shocks and a risky market for investors.

The IMF representative in Islamabad, Paul Ross said political uncertainty, chronic insecurity and a budget deficit inflated by spending to tackle militancy are threats to recovery.

However, Ross said the outlook is still brighter than the one two years ago.

Inflation has dropped to 13 per cent, foreign reserves are in a better position and the current account deficit has come down to 3 per cent of GDP this year.

Inflation in 2008 was 25 per cent, central bank reserves had fallen drastically and current account deficit climbed to 8.5 per cent.

Reader Comments (3)

  • Meekal Ahmed
    May 25, 2010 - 8:18PM

    I think this is a fair assessment. The economy is more stable now but not yet out of the woods. It needs to get back on a track of higher growth which will mean more jobs and less poverty. The trick is to do that without igniting inflationary pressures. Inflation needs to come down; a level of 13% p.a. is simply unacceptable. I hear next years inflation target is 8%. That is still too high.Recommend

  • ahmad
    May 25, 2010 - 9:28PM

    With a deteriorating economic situation in western economies, pakistan needs to get its house in order to take advantage of fleeing investors seeking safe havens in developing economies. We have a huge agriculture sector and with food shortages world wide we need to encourage more investment in agriculture, water management etc. Their are huge untapped opportunities for which macro economic stability and controlling terrorism is key.Recommend

  • Meekal Ahmed
    May 25, 2010 - 11:51PM

    Well said. The only problem is that with Europe struggling the demand for our exports destined for the Euro area will fall. Furthermore, with the Euro at a four-year low (as investors flee their bonds) we are loosing price competitveness.Recommend

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