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Pakistan economy facing challenges of energy crisis, low investment: IMF
ISLAMABAD: The International Monetary Fund (IMF) on Saturday said that Pakistans economy is braving serious challenges of an energy crisis and fast dwindling investment that is why it needs to ramp up efforts to carve out a long-term recipe to stimulate growth and reduce rising unemployment.
Pakistans economy is exposed to the worst effects of the floods and appalling security. The government has though undertaken many economic reforms, yet there are many serious challenges of energy crisis and dwindling investment.
Adnan Mazarei, Assistant Director of IMF for Middle East and Central Asia, after a seminar on Revival of Pakistan Economy stated this during a press briefing here on Saturday.
Mazarei expressed his dissatisfaction over the governments performance in the energy sector and asked it to restructure the power sector to make it turn around. The broadening of the tax base is also one of the biggest challenges the Pakistan economy is braving as the political consequences also negatively impact on the economy and people avoid paying taxes because they wanted an honest government and some dividends in return.
He said that fiscal imbalances are also needed to be addressed. Pakistan needs inclusive growth and employment generation as well as better distribution of resources and lowering of poverty rate to ensure equitable benefit to the people.
When his attention was drawn towards the increasing current account deficit that has risen to $1.6 billion he said that Pakistan external account position would not be as good as was last year mainly because of the difficult global economic situation and Pakistan has to adopt a policy mix to achieve growth and employment generation.
The private sector, particularly the SMEs (small medium enterprises), needed to have easy access to loans in commercial banks so that they could play pivotal role in stimulating the growth, he said.
Mazarei said that long-term issues are very simple as investment required safe and transparent regulations, elimination of energy crisis and investment in human development to achieve sustainable and long-term growth. He said the government has to bring about structural and management changes in the power sector to resolve the long-standing problem because price changes would not improve the situation.
Mazarei said fiscal decentralization with the approval of 18th Constitutional Amendment and 7th NFC Award has brought considerable structural challenges for the economic team on fiscal side. This demands the new rules to maintain the economic discipline in the country.
The IMF representative said that positive and constructive talks with the Pakistan economic team about the economic situation of the country during the Article IV discussion in Dubai. While drawing his attention towards the KESC privatisation, when asked as to why IMF and donors agencies are exerting pressure on Pakistan to pursue the reforms which had failed in the past to deliver, Mazarei said IMF is not directly related to power sector and not in favour of the privatisation of power sector entities, but wants the structural reforms in the bleeding sector.
Finance Minister Dr Abdul Hafeez Sheikh said that role of the government representative during the day-long seminar was to listen to the economists, business community and development partners and share with them the steps taken for the economic reforms in the country. He said the economic team held very constructive discussion with the IMF during Article IV discussion in Dubai on economic reforms and about way forward policy mix to move on to high growth path.
Hafeez Sheikh said that first four months of the current fiscal year were very positive with exports going over 6 billion dollar which were 23% more than the same period of previous year and remittances 4.2 billion dollars, 23% up by the same period of last year. The minister said the growth in taxes during the first four months was 28% with total collection of Rs509 billion compared to the same period of last year.
Pak economy facing challenges of energy crisis, low investment: IMF
ISLAMABAD: The International Monetary Fund (IMF) on Saturday said that Pakistans economy is braving serious challenges of an energy crisis and fast dwindling investment that is why it needs to ramp up efforts to carve out a long-term recipe to stimulate growth and reduce rising unemployment.
Pakistans economy is exposed to the worst effects of the floods and appalling security. The government has though undertaken many economic reforms, yet there are many serious challenges of energy crisis and dwindling investment.
Adnan Mazarei, Assistant Director of IMF for Middle East and Central Asia, after a seminar on Revival of Pakistan Economy stated this during a press briefing here on Saturday.
Mazarei expressed his dissatisfaction over the governments performance in the energy sector and asked it to restructure the power sector to make it turn around. The broadening of the tax base is also one of the biggest challenges the Pakistan economy is braving as the political consequences also negatively impact on the economy and people avoid paying taxes because they wanted an honest government and some dividends in return.
He said that fiscal imbalances are also needed to be addressed. Pakistan needs inclusive growth and employment generation as well as better distribution of resources and lowering of poverty rate to ensure equitable benefit to the people.
When his attention was drawn towards the increasing current account deficit that has risen to $1.6 billion he said that Pakistan external account position would not be as good as was last year mainly because of the difficult global economic situation and Pakistan has to adopt a policy mix to achieve growth and employment generation.
The private sector, particularly the SMEs (small medium enterprises), needed to have easy access to loans in commercial banks so that they could play pivotal role in stimulating the growth, he said.
Mazarei said that long-term issues are very simple as investment required safe and transparent regulations, elimination of energy crisis and investment in human development to achieve sustainable and long-term growth. He said the government has to bring about structural and management changes in the power sector to resolve the long-standing problem because price changes would not improve the situation.
Mazarei said fiscal decentralization with the approval of 18th Constitutional Amendment and 7th NFC Award has brought considerable structural challenges for the economic team on fiscal side. This demands the new rules to maintain the economic discipline in the country.
The IMF representative said that positive and constructive talks with the Pakistan economic team about the economic situation of the country during the Article IV discussion in Dubai. While drawing his attention towards the KESC privatisation, when asked as to why IMF and donors agencies are exerting pressure on Pakistan to pursue the reforms which had failed in the past to deliver, Mazarei said IMF is not directly related to power sector and not in favour of the privatisation of power sector entities, but wants the structural reforms in the bleeding sector.
Finance Minister Dr Abdul Hafeez Sheikh said that role of the government representative during the day-long seminar was to listen to the economists, business community and development partners and share with them the steps taken for the economic reforms in the country. He said the economic team held very constructive discussion with the IMF during Article IV discussion in Dubai on economic reforms and about way forward policy mix to move on to high growth path.
Hafeez Sheikh said that first four months of the current fiscal year were very positive with exports going over 6 billion dollar which were 23% more than the same period of previous year and remittances 4.2 billion dollars, 23% up by the same period of last year. The minister said the growth in taxes during the first four months was 28% with total collection of Rs509 billion compared to the same period of last year.
Pak economy facing challenges of energy crisis, low investment: IMF
