IMF国际货币组织全球-Pakistan_Request-for-an-Extended-Arrangement-Under-the-Extended-Fund-Facility_96页_1mb

IMF Country Report No. 19/212: Pakistan

Core Content

The International Monetary Fund (IMF) approved a 39-month Extended Fund Facility (EFF) arrangement for Pakistan totaling SDR 4,268 million (about US$6 billion or 210 percent of quota) on July 3, 2019. This program is designed to support Pakistan's economic reform agenda, aiming to reduce vulnerabilities, restore macroeconomic stability, and promote sustainable and balanced growth.

Main Points

1. Program Objectives

• Stabilize the economy and lay the foundation for robust and balanced growth.
• Reduce public debt and enhance resilience through fiscal consolidation.
• Expand social spending and support the most vulnerable populations.
• Restore competitiveness and rebuild official reserves via a flexible exchange rate.
• Eliminate quasi-fiscal losses in the energy sector.
• Strengthen institutions, improve governance and transparency, and promote an investment-friendly environment.

2. Key Policies

• Fiscal Consolidation: The program includes an ambitious FY 2020 budget and efforts to increase revenue mobilization by 4-5 percentage points of GDP.
• Exchange Rate Policy: A market-determined exchange rate will be implemented, supported by monetary policy conducted by an independent central bank.
• Energy Sector Reforms: Tariff adjustments, depoliticization of pricing mechanisms, and cost recovery are central to this reform.
• Social Protection: Enhancing safety nets and promoting economic empowerment of women.
• Structural Reforms: Strengthening governance, improving productivity, and addressing corruption and AML/CFT issues.

3. IMF Support and Financing

• The initial disbursement will be SDR716 million (about US$1 billion).
• The remaining amount will be phased over the program period.
• The program is expected to attract over USD38 billion in external financing from multilateral and bilateral partners.
• Bilateral commitments have been secured, including new loans aligned with program objectives.

4. Economic Context and Challenges

• Pakistan has faced unbalanced economic policies, including large fiscal deficits, loose monetary policy, and overvalued exchange rates, which fueled short-term growth but eroded macroeconomic buffers.
• Structural weaknesses such as inefficient SOEs, weak tax administration, and a large informal economy have hampered long-term growth.
• Inflation has accelerated, reaching a near five-year high of 9.1 percent in May 2019.
• Current account deficit remains large at 4.5 percent of GDP in FY 2019, driven by higher oil imports and weak export growth.

5. Program Risks and Implementation

• Incomplete policy implementation has derailed past reforms.
• Strong and steadfast implementation is critical to mitigate risks and achieve program goals.
• Policy uncertainty and limited financing continue to weigh on confidence and investment.

Key Economic Indicators (2014/15–2019/20)

Summary of Program Elements

• Fiscal Consolidation: Reduce public debt, increase revenue, and support provinces.
• Exchange Rate Flexibility: Restore competitiveness, rebuild reserves, and reduce inflation.
• Energy Reforms: Depoliticize tariff setting, adjust to cost recovery, and reduce quasi-fiscal losses.
• Social Spending: Strengthen safety nets and support vulnerable groups.
• Structural Reforms: Improve institutions, governance, and transparency; enhance the business environment.

Conclusion

The IMF-supported program aims to address long-standing economic imbalances and structural weaknesses in Pakistan. It emphasizes fiscal discipline, exchange rate flexibility, energy sector reform, and inclusive growth. The program's success will depend on effective implementation and sustained support from international partners. The program's financial support is expected to coalesce over USD38 billion, essential for meeting Pakistan's large financing needs.