Downside risks for Pakistan’s economy remain exceptionally high, the International Monetary Fund (IMF) said on Friday in its staff report ahead of the government’s talks with the fund on a longer term progamme.
An IMF mission is expected to visit the country this month to discuss a new programme, ahead of the government beginning its annual budget-making process for the next financial year. “Downside risks remain exceptionally high. While the new government has indicated its intention to continue the SBAs (standby arrangement) policies, political uncertainty remains significant,” said the fund in its staff report following the second and final review under the SBA.
The fund added that political complexities and high cost of living could weigh on policy, adding that policy slippages, together with lower external financing, could undermine the narrow path to debt sustainability and place pressure on the exchange rate.—Agencies
