KARACHI: Pakistan’s economy is fairly stable now and if structural reforms stay the course, growth will continue to pick up in pace and quality, said IMF Resident Representative Tokhir Mirzoev on Friday.

During a meeting with a select group of journalists, he said many factors are converging to create an environment conducive for local and foreign investment.

He saw the China-Pakistan Economic Corridor (CPEC) in a positive light and considered it an early signal of growing investor interest in Pakistan as a high-growth potential country.

The discussion focused on the economy, CPEC projects, key challenges and the distance covered on the road to recovery.

“We see very positive prospects of progress in Pakistan. Notwith­standing some missed targets in the course of the programme implementation, Pakistan has built a strong track record over the past three years (IMF programme started in Sept 2013). The economy was pulled from the brink of a crisis,” he said.

“The economic team managed to restore macroeconomic stability and strengthen fiscal and external buffers. And now a number of important structural reforms are under way, aimed at increasing structural resilience and competitiveness of the economy. Sustained implementation of these reforms will pave way for higher and more inclusive economic growth in the period ahead,” the IMF official said during the meeting.

Responding to a question on the value of windfall of low oil prices to the economy, the mild-mannered IMF official said the saving on that count was used responsibly by the government to build reserves crucial for economic sustainability.

It is not important whether some economic factors came through skill or luck. The really important question is whether economic policy response to these factors was appropriate, he said.

“The fact is that despite limited budget resources, the authorities chose to use savings from oil import bill to build up foreign exchange reserves as a buffer that can absorb unforeseen future shocks to economy. This increased resilience will help make macroeconomic stability more durable in the period ahead,” he said.

About quality of statistics, including at the provincial level, he informed that IMF is already extending technical support in some key areas, such as national account and inflation.

“There is always room for improvement and data coverage could be expanded to include, for example, retail sales and real estate market. However, it is up to the federal government to streamline and synchronise flow of data from all tiers of the government for better planning and more effective policy interventions,” he said.

Commenting on key drivers of growth, he mentioned large-scale manufacturing sector, construction, CPEC project and service sector.

Listing highlights of the reforms carried out by the government, he talked about withholding tax on banking transactions, steps to discourage SRO culture and discretionary powers to grant tax exemptions and the planned ban on benami property transactions.

He thought the gains may not be immediately visible, but such measures will go a long way in making the system fairer and more efficient.

He also highlighted the value of public support to carry out reforms despite resistance from vested groups.

Published in Dawn, November 14th, 2015