IMF, WB reports on economy distressing: PEW

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Wider than expected budget deficit expected
Broadened tax net to help reduce trade deficit

The Pakistan Economy Watch (PEW) on Saturday said reports of International Monetary Fund (IMF) and World Bank (WB) about Pakistan’s economy are disturbing.
It asked the government to take steps to revive economy as exports, investment and remittances continue to fall threatening wider than expected budget deficit.
The multilateral lenders usually issue encouraging reports using highly diplomatic language but they also point towards serious issues between the lines, said Dr. Murtaza Mughal, President PEW.
He said that the latest reports about Pakistan indicates that things are moving in the right direction and growth is picking up which is expected to touch mark of 5.4 percent after half decade.

 The report also says that investment is coming from China while the country is enjoying stability after a long time.
Dr. Murtaza Mughal said that however, the reports of IMF and WB also pointed towards key human development indicators that have shown no progress since 2010 which means that the poor are yet to get the benefit of better economic situation.
The reports have also expressed fear that the China-Pakistan Economic Corridor could be impeded by delays due to revenue mobilisation while exports are projected to continue sliding due to volatilities in key markets such as the UK and EU.
He said that lenders have also expressed pessimism about remittances that could also come under pressure given the impact of low oil prices on the oil-producing economies.
The power sector which continue to cripple economy has seen improved management but further reforms are needed to put it on a sustainable footing, he added.
He said that the fiscal deficit has shrunk to a nine-year low, but the trade deficit has ballooned which can be controlled if the tax base is broadened quickly. The government still has time to undertake reforms to improve economy, he said.

In: Economy WatchAuthor: AAMIR JAVED