Pakistan must reform system: IMF

WASHINGTON: Pakistan’s government must push through politically difficult tax reforms and curb government borrowing that spurs inflation, a senior IMF official said on Thursday. Adnan Mazarei, the IMF mission chief for Pakistan, told reporters that: “Because the government doesn’t get revenues, it has to finance its deficit, as it is doing now, through borrowing from the central bank .... by printing money,” he said.

“Sooner than later it will reflect itself in a sizable increase in the inflation rate,” said Mazerei. “Pakistan has one of the lowest levels of taxation in the world, at less than 10 per cent of gross domestic product,” said Mazarei.

Published in The Express Tribune, October 9^th, 2010.