Article Type

Article

Description

In November 2008, Pakistan entered into a stand by arrangement with the IMF to support the country’s stabilization program and fill in the external financing gap. Pakistan has successfully drawn down the first two tranches of this loan. Most of the stabilization indicators are showing improvement and if the present efforts to maintain the fiscal discipline, curtail borrowings from the State Bank of Pakistan and build up foreign exchange reserves remain intact it is likely that IMF will be able to complete the forthcoming reviews successfully and the agreement should reach an orderly termination point by June 2010. While the implementation of the on-going program of IMF proceeds during the next 18 months we must prepare the grounds for the transition from the current stabilization to the next growth resumption phase. This transition will not take place automatically but will require public policy measures of a different kind. Macro-economic stability attained through the IMF program will, of course, lubricate this transition by allowing the government some degree of freedom that it does not enjoy at present. But the biggest challenge is Restoration of Confidence in the economy.

Publication Source

Dawn

Publication Date

3-15-2009

Pages

1-4

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