Washington, Dec 14 (AFP) Pakistan's economy has gainedmomentum amid improved security and other policy moves, butthe government needs to do more to head off growing risks, theInternational Monetary Fund said today.
An IMF team wrapped up a week-long visit in Islamabad toreview the economy, and mission chief Harald Finger warnedthat discipline in government accounts to contain the deficitand allowing the currency to move more freely will be key.
"While the authorities have taken steps to address thesechallenges, greater efforts are required to prevent a furtherbuild-up of vulnerabilities and preserve Pakistan's hard-wonmacroeconomic stability," Finger said in a statement, notingthat a surge of imports has drained the central bank'sreserves.
The fund now expects the country's economy to grow by 5.6per cent this year, an improvement on the forecast releasedjust two months ago, "supported by improved securityconditions, energy supply, infrastructure investment andagriculture."That would be the fastest growth in a decade, coming asthe country benefits from a wave of Chinese investment ofnearly USD 50 billion in transportation and energyinfrastructure.
But many economists say that to have a real impact onpoverty, the country would need a sustainable growth rate of6-8 per cent for several years in a row.
"While economic growth has been accelerating andinflation remains subdued, Pakistan is facing important near-term economic challenges," Finger said.
In addition to carefully managing debt liabilities, hestressed that "continuing to strengthen mechanisms forprotecting the most vulnerable will be critical to supportinclusive growth."The comments came as part of a "post program review" justover a year after the end of a three-year, $6 billion IMF aidprogram. (AFP)UZM.
This is unedited, unformatted feed from the Press Trust of India wire.