The International Monetary Fund (IMF) announced on Wednesday that Pakistan's economy had improved due to prudent monetary and fiscal policies, strong capital inflows, robust remittances from abroad and lower oil prices, The Wallstreet Journal reported.
“The authorities have made progress with consolidating macroeconomic stability, strengthening public finances and rebuilding foreign-exchange buffers,” Director of the IMF’s Middle East and Central Asia department Masood Ahmed said in a statement following a recent visit to Islamabad and Lahore.
Ahmed went on to say that economic growth was strengthening and inflation was slowing as a result.
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The key interest rate was slashed by Pakistan's central bank in January to 8.5 per cent citing a slowdown in inflation. Other factors, including plummeting oil prices and declining global prices for other commodities have also contributed to the betterment of the economy.
Ahmed advised Pakistan's government that further bolstering the revenue by broadening the tax base and improving compliance would allow it to further reduce its public debt while increasing its spending in key sectors, namely health and education.
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The government should also “reinforce and build on recent stability gains to work towards achieving higher, sustainable and inclusive economic growth," Ahmed added.
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The IMF director noted that the longstanding energy crisis across the country should be addressed as a priority for the government. Other priorities for the government should also include restructuring and privatising public-sector enterprises, proceeding with investment-climate and trade reforms as well as continuing with financial-sector reforms.
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