Downside risks for Pakistan remain exceptionally high, says IMF
KARACHI, Pakistan - Downside risks for the Pakistani economy remain exceptionally high, the International Monetary Fund said on Friday, in its staff report on the country, ahead of talks with the fund on a longer term progamme.
"Downside risks remain exceptionally high. While the new government has indicated its intention to continue the SBA’s policies, political uncertainty remains significant," said the fund in its staff report following the second and final review under the standby arrangement . The IMF also said higher commodity prices and disruptions to shipping, or tighter global financial conditions, would also adversely affect external stability for the cash-strapped nation.Pakistan last month completed a short-term $3 billion programme, which helped stave off sovereign default, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer term programme.
It is still dealing with a high fiscal shortfall and while it has controlled its external account deficit through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2% this year compared to negative growth last year.
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