Karachi : The last review of Pakistan on going bailout program with International Monetary Fund team has started. Government of Pakistan has shown firm commitment on working with IMF on the reforms agenda for Economic Growth and Stability of the Country. The meetings are in progress for overall macroeconomic Indicators, efforts on fiscal consolidation, structural reforms, energy sector viability and state own entity governance said ateeq ur rehman (economic & financial analyst).
The biggest advantage of the IMF program will be providing precious foreign currency liquidity and building confidence of multilateral and bilateral lenders.
He said that for IMF, we have to meet Tax revenue targets by further increasing taxes. We are already heavily relying on 80% indirect taxes. Further expanding the tax net to increase “the tax to gdp ratio” will cause un due hardship to lower income group. Secondly, IMF’s dictate on the removal of subsidies without any compensation is hitting deprived class in terms of inflation, lay off, high cost of doing business, utility and fuel prices hike.
Further increase in electricity prices will bring detrimental impact on common man and raise “cost push inflation”.
While again going to IMF, external debt management strategy coupled with strong institution arrangements, privatization of loss making entities, stop growth of circular debt, resilience of producing indigenous raw material and improving import substitution industry is necessary said ateeq.
Going to IMF for financial arrangement is unavoidable but we have to overcome the weaknesses, too.
