Pakistan ‘unlikely to break free from IMF support, incomplete PM terms’, says IIF

On its way to missing targets in the current financial year, Pakistan’s biggest challenge now is fiscal consolidation and reforms amid a weak coalition government and political instability stemming from accusations of electoral fraud, the Washington-based Institute of International Finance (IIF) has said. On the other hand, exchange rate, monetary policy, energy subsidies and state-owned enterprises (SOE) reforms are unlikely to be a barrier to the new IMF programme on the back of good progress on all these fronts over the past year, said the IIF, a global association of financial institutions comprising the world’s largest commercial and investment banks, insurance companies and investment management firms. “The biggest challenge will come from fiscal consolidation,” the IIF said, noting that this was an area of particular importance, as large fiscal deficits have led to public debt increasing from 55pc of GDP in the fiscal year 2009-10 to 79pc in 2022-23.