Islamabad: The International Monetary funds (IMF) blames the current Government (PTI) and the previous Government (PML-N) for the economic fall down of Pakistan.
According to a report, IMF has given a background of how the economic difficulties emerged and how corrective measures were delayed without directly naming the two governments.
IMF held the PML-N government responsible for unbalanced policies and unfinished reforms. “Misaligned economic policies, including large fiscal deficits, loose monetary policy, and defense of an overvalued exchange rate, fueled consumption and short-term growth in recent years, but steadily eroded macroeconomic buffers, increased external and public debt, and depleted international reserves,” it said.
Likewise, the IMF also blamed the current PTI government for delayed and yet unsatisfactory policy action for correction. Hence despite some exchange rate depreciation and significant monetary policy tightening, sizable foreign exchange interventions continued through April 2019.
“Similarly, fiscal slippages in the first half of the fiscal year have been significant despite the adoption of two budget amendments. Finally, increases in power and gas tariffs have not been sufficient to stem the accumulation of quasi-fiscal losses,” the Fund noted.
It also pointed out that sizable short-term financing from bilateral creditors provided critical financing relief, but “also deferred the urgency to tackle the underlying problems while increasing the maturing debt obligations due in coming years”.
IMF also said that the authorities were committed to carrying out the new programme, but the outlook was subject to considerable risks. The risks relate mainly to domestic policy implementation as well as external events. It said Pakistan’s capacity to repay its Fund obligations in a timely manner was adequate but was subject to “higher than usual risks”.
