Nathan Porter, the International Monetary Fund’s (IMF) Mission Chief for Pakistan, recently hinted that the ongoing loan program might be Pakistan’s last, provided the country fully implements the recommended economic reforms. In an interview with Voice of America, Porter discussed Pakistan’s economic challenges and the IMF’s role in stabilizing the economy. He confirmed that the First Review of the program will begin in December 2024 and is expected to conclude by March-April 2025.
Prime Minister Shehbaz Sharif had earlier expressed hope that the $7 billion IMF loan would be the final one for Pakistan. Porter echoed this sentiment, suggesting that if Pakistan sincerely commits to the reforms, this could indeed be the case. He noted that, despite the economic instability seen in mid-2023, Pakistan has achieved a certain degree of stability.
Porter emphasized the IMF’s focus on maintaining a stable exchange rate, implementing sound fiscal and monetary policies, and promoting private sector growth to stimulate economic development. He defended the IMF’s approach, stating that its loan programs are tailored to each country’s specific needs and rejected claims that the program was overly harsh.
On the topic of Chinese loans to Pakistan, Porter affirmed that the IMF’s stance remains consistent with those of other lenders. He also pointed out the need for a more effective tax system, specifically targeting the agriculture, retail, and property sectors, in order to relieve pressure on the general populace. Porter attributed the decline in foreign investment to excessive government intervention, recommending that Pakistan reduce such involvement, reform public institutions, and lower power generation costs to attract more investment.
Porter concluded by stating that the IMF plans to release a detailed report on these economic challenges soon.
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