IMF says Pakistan’s reforms could end need for future loan programs

IMF Mission Chief for Pakistan Nathan Porter in an interview with Voice of America said IMF's new loan program was much tougher and if Pakistan implements reforms then the current loan program might be the last one.

In an interview, the IMF official said that during the previous program, inflation was high the current account deficit was also high and during this time there was almost ‘no economic growth’.

“We were able to stabilize the situation with subsidies, concessions make businesses ineffective,” the IMF mission chief said.

“This reduces growth prospects,” the IMF mission chief said.

Nathan Porter has emphasized the importance of sustainable economic growth without the need for excessive incentives or concessions. Speaking at a recent event, Porter reiterated the IMF's support for both domestic and foreign investments, stating that the government’s role should primarily focus on providing necessary infrastructure and preparing a skilled labor force for businesses.

Reflecting on Pakistan’s economic progress, Porter acknowledged the significant economic stability achieved over the last 12 months, despite facing volatility and uncertainty in mid-2023. "The change has occurred very quickly, and this provides a good foundation for moving forward," he noted.

Porter further stressed that Pakistan should aim to maintain a strong exchange rate, alongside robust financial and monetary policies, to avoid the repeated cycles of growth and decline that have historically impacted the country. He highlighted that unlocking economic growth and development through the private sector, coupled with easing economic restrictions, would be more beneficial for the country’s long-term progress.

Porter hinted that the current IMF program could potentially be the last for Pakistan, provided the country continues on its path of economic stability and self-reliance.