ISLAMABAD    -    The International Monetary Fund (IMF) once again projected Pakistan’s GDP growth at a lower 2.4 percent during ongoing fiscal year but noted progress in several key areas.

The country’s economic programme is off to a promising start but decisive implementation of reforms is critical to pave the way for stronger and sustainable growth, said a press release posted on the IMF website.

“The near-term macroeconomic outlook is broadly unchanged from the time of the program approval, with growth projected at 2.4 percent in FY2019/20,” said IMF mission head Ernesto Ramirez Rigo, after the conclusion of a five days staff visit (from Sept 16-20).

He however projected that inflation was expected to decline in the coming months, and the current account was adjusting more rapidly than anticipated.

“While the authorities’ economic reform program is still in its early stages, there has been progress in some key areas. The transition to a market-determined exchange rate has started to deliver positive results on the external balance, exchange rate volatility has diminished, monetary policy is helping to control inflation, and the SBP has improved its foreign exchange buffers,” Rigo said.

Also, he said, “There has been a significant improvement in tax revenue collections, with taxes showing double-digit growth net of exporters refunds. Moreover, the FBR is undertaking significant steps to improve tax administration and its interface with taxpayers.

“Staff and the authorities have analyzed the worse than expected fiscal results of FY2018/19, which were partially the result of one-off factors and should not jeopardize the ambitious fiscal targets for FY2019/20. Importantly, the social spending measures in the program have been implemented.”

The IMF mission was here to take stock of economic developments since the start of the Extended Fund Facility (EFF) and discuss progress in the implementation of economic policies. A full mission for the first review under the EFF is planned for late-October.

Highlighting the downside of it, the mission chief said that the domestic and international risks remain, and structural economic challenges persist. In this context, he said, the authorities need to press ahead with their reform agenda.

“In order to complete the first review, an IMF staff team plans to return to Pakistan in late October to assess the end-September program targets. The IMF team is grateful for the authorities’ hospitality and close cooperation,” the statement read.

The IMF had already clarified that there would be no change in economic targets set for Pakistan including annual tax collection target for the current fiscal year. It was supposed that Pakistan and IMF might renegotiate the programme after budget deficit had ballooned to 8.9 percent of Gross Domestic Product (GDP) in last fiscal year against revised target of 7.2 percent of GDP.

Earlier, IMF mission chief Ernesto Ramirez Rigo, along with his team, called on Economic Affairs minister Muhammad Hammad Azhar at the Economic Affairs Division. In-depth discussions were held on the general economic situation of the country.

The minister appraised the IMF team about the structural reforms being carried out and the commitment of the present government to ensure economic stability in the country. The visiting team expressed satisfaction over the pace of structural reforms and economic stability of Pakistan.