International Monetary Fund blames PTI, PLM-N for Pakistan's economic crisis

Islamabad, Islamabad, PakistanUpdated: Jul 11, 2019, 12:43 PM IST

File photo: Pakistan Prime Minister Imran Khan. Photograph:(AFP)

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The IMF blamed the current Imran Khan-led PTI government for delayed and yet unsatisfactory policy action for correction.

The International Monetary Fund has lashed out at ruling Imran Khan-led Pakistan Tehreek-i-Insaf for not adopting adequate policies to address the economic crisis in the country.

The IMF blamed the current PTI government for delayed and yet unsatisfactory policy action for correction.

Hence despite some exchange rate depreciation and significant monetary policy tightening, sizeable foreign exchange interventions continued through April 2019, reported Dawn.

"Similarly, fiscal slippages in the first half of the fiscal year have been significant despite the adoption of two budget amendments. Finally, increases in power and gas tariffs have not been sufficient to stem the accumulation of quasi-fiscal losses," the IMF noted.

IMF made these remarks in its staff report on $6 billion bailouts to Pakistan approved by its executive board earlier this week.

The agency held the PML-N government responsible for unbalanced policies and unfinished reforms.

"Misaligned economic policies, including large fiscal deficits, loose monetary policy, and defence of an overvalued exchange rate, fuelled consumption and short-term growth in recent years, but steadily eroded macroeconomic buffers, increased external and public debt, and depleted international reserves," it said.

IMF also pointed out that dull progress in structural progress continued to hamper investment and allowed "inefficient state-owned entities (SOEs) to linger and a large informal economy to expand".

The three-year bailout package was approved by the IMF's Executive Board last week."IMF Executive Board approved today a three-year $6 billion loan to support Pakistan's economic plan, which aims to return sustainable growth to the country's economy and improve the standards of living," Gerry Rice, the IMF's spokesperson had confirmed the news on Twitter on July 3.

The Asian Development Bank has also announced plans to lend $10 billion to Pakistan for various development projects over the next five years.