IMF to review economy for Stand-By-Arrangement

Karachi: IMF has planned to review the economy of Pakistan for the Stand- By-Arrangement (SBA) and meeting is expected to be held from July 20-27, 2011 with the Ministry of Finance for formal review.

According to Alfalah Securities Limited, the government has taken several budgetary measures to meet the IMF conditions. IMF wants the government to focus on measures to boost growth, increase revenue collection and restrict expenditures. Reducing the double digit inflation and narrowing deficit remains the key requirements.

However, IMF is not expected to reactivate the SBA as the targeted fiscal deficit of 4% is likely to be missed. On the other hand, the high levels of government borrowing from banks would fuel inflation and would make loans expensive for private investors. Moreover, since the election season is approaching due to which the subsidies are also not expected to be cut along with higher pressure on expenditures by the government.

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