The International Monetary Fund (IMF) has urged Pakistan to reduce state intervention in the economy, enhance competition, and implement urgent energy sector reforms to support sustainable growth and private sector development.
In a statement concluding an unplanned visit to Islamabad from November 12 to 15, 2024, IMF mission chief Nathan Porter emphasized the importance of prudent fiscal and monetary policies, revenue generation from untapped tax bases, and delegating more social and development responsibilities to provinces.
The visit primarily assessed Pakistan’s progress under the Extended Fund Facility (EFF) program. Discussions focused on economic policies and reforms to address vulnerabilities and promote long-term growth. The IMF team engaged with federal and provincial officials, the State Bank of Pakistan, and private sector representatives.
Key recommendations included implementing agricultural income taxes by January 2025, achieving a revenue target of Rs12,970 billion for the fiscal year, and strengthening the Finance Division’s capacity for macro-fiscal forecasting. The IMF also called for legal changes to limit federal discretion over supplementary grants while allowing some budgetary flexibility.
Structural energy reforms were highlighted as critical for restoring sector viability and reducing state intervention to encourage private sector participation. The next EFF program review is scheduled for early 2025.
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