IMF sees Pakistan growth picking up

An easing of Pakistan's chronic electricity shortages has boosted growth, says IMF report.

WASHINGTON: The International Monetary Fund (IMF) said Friday it saw strong signs of growth in Pakistan as the long-troubled economy undertakes structural reforms.

The IMF, which this week released a fresh $555.6 million as part of its support program for Pakistan, confirmed its recent forecast of 3.1 per cent growth this year, which was revised up from an earlier 2.8 per cent.

"The overall economic situation in Pakistan is gradually improving," said Jeffrey Franks, the IMF mission chief for the country.

"That 3.1 per cent may still be a bit on the conservative side, so we see indicators of growth that are relatively strong considering the fiscal adjustment that has taken place," he told reporters on a conference call.

For the 2014-15 fiscal year, the IMF expected Pakistan's growth to accelerate to around 3.7 per cent.

An IMF report said that the growth was boosted by a stronger manufacturing industry thanks to an easing of Pakistan's chronic electricity shortages, despite weaknesses in agriculture.

But the report cautioned that Pakistan still had tight foreign reserves and security challenges, including Taliban violence.

The report also said that Prime Minister Nawaz Sharif's government, despite its commitment to IMF-backed reforms, faced "strong" political resistance to certain structural measures.

Sharif's government, after taking office in June, reached a $6.7 billion bailout deal with the IMF which insisted on economic reforms, especially in the energy sector and tax system.

Yaseen Anwar, the governor of the State Bank of Pakistan who was appointed by a previous government, resigned in January ahead of the latest IMF review.