Islamabad, November 16, 2024 – The International Monetary Fund (IMF) has recommended that Pakistan reduce state intervention in its economy and foster greater competition to support sustainable growth. This advice followed the conclusion of a staff visit to Pakistan, led by Nathan Porter, from November 12 to 15, 2024.
During the visit, the IMF team engaged with senior officials from the federal and provincial governments, the State Bank of Pakistan, and representatives from the private sector. Such staff visits are part of routine semi-annual program reviews, aimed at assessing economic developments, reform progress, and policy measures in countries with IMF-supported programs.
In a statement released at the conclusion of the visit, Nathan Porter emphasized the importance of structural reforms and prudent economic policies. He highlighted the need for continued fiscal discipline, improved tax revenue mobilization, and enhanced social and development responsibilities at the provincial level.
“Constructive efforts in structural energy reforms and reducing state intervention in the economy are critical to fostering a dynamic private sector. These measures can lay the groundwork for stronger, sustainable, and inclusive growth,” Porter said. He also underlined the necessity of maintaining prudent fiscal and monetary policies to address vulnerabilities and ensure economic stability.
The IMF encouraged Pakistan to strengthen its commitment to reforms outlined in the 2024 Extended Fund Facility (EFF), which is designed to support economic stability and growth. The statement reaffirmed the importance of program implementation, noting its potential to improve living standards across the country.
The IMF mission also stressed the urgency of addressing challenges in Pakistan’s energy sector. Structural reforms in this area are deemed vital to restoring its financial viability and reducing the burden on public finances.
The staff visit concluded with an agreement to continue engaging with Pakistani authorities to ensure the successful implementation of agreed measures. The IMF’s next mission for the formal review of Pakistan’s EFF program is scheduled for the first quarter of 2025.
As Pakistan navigates significant economic challenges, including inflation and fiscal constraints, the IMF’s guidance aims to create a framework for stability and growth. However, implementing these reforms will require strong political will and sustained commitment from both federal and provincial governments.
