An International Monetary Fund (IMF) mission, led by Mr. Jeffrey Franks, visited Pakistan from June 19 to July 2, 2013 to conduct the annual Article IV consultation discussions and to hold policy discussions with the authorities about possible IMF financial support for the government’s reform program under a three-year Extended Fund Facility (EFF).
At the conclusion of its work Thursday, Mr. Franks issued the following statement:
“The mission has reached a staff-level agreement with the authorities on the key elements of an economic reform program that is strongly owned by the authorities and that can be supported by a 36-month arrangement totaling some US$5.3 billion under the EFF.
“Pakistan faces a challenging economic outlook, compounded by an uncertain global and regional environment. Macroeconomic imbalances have combined with longstanding structural problems, particularly in the energy sector, to sap the country’s growth potential.
“A determined effort is required to improve medium-term growth and move toward sustainable fiscal and external positions. The mission and the authorities agreed on the need for a sustained improvement in tax collections as well as a significant widening of the tax base and a more equitably shared tax burden, including through a phase-out of all existing statutory regulatory orders (SROs) and other measures which grant special rates and tax exemptions.
“Restructuring and privatization of public enterprises—including those in the energy sector—are intended to help restore fiscal stability as well as boosting investor confidence in Pakistan’s future economic prospects and opportunities, leading to higher growth and job creation.”
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