IMF国际货币组织全球-Pakistan_First-Review-Under-the-Extended-Arrangement-Under-the-Extended-Fund-Facility-and-Request-for-Modification-of-Performance-Criteria_91页_2mb

IMF Country Report No. 19/380: Pakistan

Core Content Summary

The IMF completed the first review under the Extended Fund Facility (EFF) for Pakistan on December 19, 2019, allowing the authorities to draw SDR 328 million (about US$452.4 million) and bringing total disbursements to SDR 1,044 million (about US$1,440 million). The 39-month EFF, approved on July 3, 2019, is on track, with most performance criteria and structural benchmarks met, although some were delayed.

Main Points and Key Information

Economic Developments

• Economic activity has softened but is broadly in line with expectations.
• Exchange rate adjustment has been orderly, with the rupee stabilizing at PRs/US$155.
• Inflation has started to stabilize, with headline inflation at 12.3% and core inflation at 8.1% in November 2019.
• External position has improved significantly, with the current account deficit shrinking by 2/3 in Q1 FY 2020 compared to Q1 FY 2019.
• Import compression and export recovery have contributed to the improvement in the current account.
• Remittances remain stagnant, and non-tax revenues almost tripled due to one-off inflows and higher central bank profits.

Program Performance

• All end-September performance criteria were observed, including the floor on net international reserves, ceilings on net domestic assets, SBP’s foreign currency swaps, government budgetary borrowing, and primary budget deficit.
• Five indicative targets were missed, but new targets have been proposed to correct them.
• Structural benchmarks have been implemented, though some faced delays, particularly in tariff adjustments and AML/CFT reforms.
• Provincial commitments have been met, with 18% growth in tax revenue and prudent spending.

Policy Recommendations

• Fiscal discipline must be sustained, with a focus on revenue mobilization and expenditure control.
• Tax reforms should be prioritized, including simplifying corporate income tax, streamlining exemptions, and harmonizing GST.
• Non-tax revenue should be leveraged to support the medium-term fiscal consolidation.
• Public financial management (PFM) reforms are necessary to improve budget transparency and discipline.
• Exchange rate flexibility is crucial for external stability and reserve accumulation.
• AML/CFT framework needs to be strengthened to exit FATF’s deficient jurisdictions list.
• Power sector arrears should be addressed through timely tariff adjustments and collection improvements.

Outlook and Risks

• Real GDP growth is projected at 2.4% for FY 2020, with net exports playing a larger role due to import compression.
• Growth is expected to strengthen to 3% in FY 2021 and 4.5-5% in the medium-term.
• CPI inflation is expected to slow to 11.8% in FY 2020 and converge to the SBP’s target of 5-7% by FY 2022.
• Current account deficit is projected to decline to 2.4% of GDP in FY 2020 and 1.8% in the medium-term.
• Risks remain high, including weak growth, fiscal underperformance, resistance to reform, and potential FATF blacklisting.

New Program Commitments

• Modification of performance criteria has been requested to align with the program’s objectives.
• New structural benchmarks are proposed in the areas of energy sector reform, AML/CFT, and public financial management.

IMF Staff Appraisal

• The program is on track, with strong fiscal performance in Q1 FY 2020.
• The transition to a market-determined exchange rate has been orderly and beneficial.
• Fiscal adjustment and reform implementation are critical for macroeconomic stability and sustainable growth.

Key Figures and Tables

• Tax Revenue Performance in Q1 FY 2020 showed 25% growth in domestic tax and 17.2% growth overall.
• Non-tax revenues increased by 0.8% of GDP due to one-off inflows and central bank profits.
• General government debt stood at 84.7% of GDP at end-September 2019.
• Gross non-performing loans (NPLs) increased slightly to 8.8% of total loans.
• Exchange rate depreciation contributed to debt sustainability concerns but was managed effectively.

Conclusion

The IMF acknowledges Pakistan’s progress in implementing economic reforms, with fiscal consolidation, exchange rate flexibility, and social safety net expansion being key areas of focus. However, challenges remain, particularly in structural reforms, debt sustainability, and external risks. The continued commitment of the Pakistani authorities to the program is essential for achieving long-term economic stability and growth.