daily Times: * Fund says growth too slow to significantly improve people’s living standards
* Lack of electricity, difficult security situation in large parts of
country contributing to deterioration
ISLAMABAD: The International Monetary Fund gave Pakistan a sobering assessment on Thursday, saying its economy was at a high risk of deteriorating into crisis and growth was too slow to significantly improve people’s living standards.
The global lender has approved a $6.7 billion loan package to help Pakistan revive its ailing economy, rebuild reserves and prevent a balance of payments crisis. “Economic performance in Pakistan has been substandard in recent years,” the IMF said, adding that gross domestic product growth averaged only 3 percent over the past five years. “Executive directors noted that Pakistan’s economic vulnerabilities and crisis risks are high, with subpar growth and unsustainable fiscal and balance of payments positions.”
Pakistan averted a balance of payments crisis in 2008 by securing a $11 billion IMF loan but that was suspended two years ago after economic and reform targets were missed. Chronic gas and electricity shortages, violent crime and a Taliban insurgency have all hampered growth and contributed to falling foreign investment in Pakistan. “A lack of reliable electricity supply and a difficult security situation in large parts of the country have contributed to the deterioration,” the IMF said, while welcoming the new government’s economic reform programme.