WASHINGTON The IMF on Thursday urged Pakistan authorities to impose discipline on the economy, notably by curbing expenditures, boosting tax collections and promoting the private sector.
International Monetary Fund executive directors, according to a summary of their recent assessment of Pakistan, said that growth -- aided by favorable agricultural output -- has picked up and should come to 4.8 percent in the 1999-2000 fiscal year after 3.1 percent in 1998-1999.
But they also voiced concern that an easing in monetary policy had put the rupee -- the national currency -- under pressure, and that cost overruns and a weak tax administration had reduced expected revenue gains, AFP reported.
"The key policy challenges for the period immediately ahead will be to maintain macroeconomic discipline and improve the competitiveness of the economy and public debt dynamics," the directors concluded.
With such an approach, they added, "Private sector confidence would likely improve and the economy would move to a higher and durable path, which is essential for reducing poverty." The fund urged authorities to tighten their expenditure control mechanisms and improve tax collection procedures in order to channel resources to poverty reduction.
The directors welcomed government moves to restructure state-owned enterprises, such as the water and power development authority and Karachi electric supply corporation, and to implement a trade liberalization plan.
According to the summary, "They underscored the importance of reforms in the areas of privatization, the energy sector and governance to energize the private sector and attract foreign direct investment." The IMF forecast growth of 4.5 percent in the 2000-2001 fiscal year, which began last July 1, with consumer prices showing a six percent gain after 3.6 percent in 1999-2000.