IMF says Pakistan's economy on track, inflation to ease

ISLAMABAD, Pakistan The International Monetary Fund (IMF) mission concluded on Friday that Pakistan has made considerable progress in the last few months "in advancing reforms and continuing sound economic policies." The IMF team led by regional chief Ernesto Ramirez Rigo visited Islamabad from Feb. 3-13 and held meetings with Pakistani officials. “The IMF staff team had constructive and productive discussions with the Pakistani authorities and commended them on the considerable progress made during the last few months in advancing reforms and continuing with sound economic policies," Rigo said in a statement. The IMF mission chief said that the economic activity has stabilized and remains on the path of gradual recovery, and the country's current account deficit has declined. Last year in July, IMF approved a much-awaited $6 billion bailout package for Pakistan to revive its ailing economy. As per the plan, Islamabad will receive $2 billion annually in phases under an extended fund facility, which has been linked with a condition of a quarterly review of the country's performance by the IMF. Under the agreement, the government of Pakistan will no longer control the dollar value against the Pakistani rupee. Instead, it will be dealt by the open market. The dollar was trading around 124 rupees when Prime Minister Imran Khan took office in August 2018. It has now risen to 154 rupees. The country is also facing price hike and growing inflation that has affected the lives of the public. However, the IMF said the foreign reserves of the country continue to rebuild at a pace considerably faster than anticipated. "Inflation should start to see a declining trend as the pass-through of exchange rate depreciation has been absorbed and supply-side constraints appear to be temporary," Rigo said. Islamabad’s current external debt stands at nearly $100 billion -- the bulk of it borrowed from the World Bank, IMF, Asian Development Bank, Islamic Development Bank, the United States, China, France and other countries, according to the State Bank of Pakistan. The South Asian nuclear state has conceded a loss of over $100 billion since 2002 after it joined the U.S.-led war against terrorism.