ISLAMABAD, Aug 23: Prime Minister Shaukat Aziz on Wednesday said Pakistan was on the path of reform and growth with stability, as macroeconomic improvements had enabled the country to attract foreign investment and absorb oil shock.

The prime minister was talking to IMF director Mohsin Khan who called on him along with a delegation here. The IMF team is visiting Pakistan for the annual review of its economy.

An official announcement said the prime minister highlighted efforts of the government to further reduce poverty by focusing on healthcare, education, women empowerment and job creation both in rural and urban areas.

In the rural areas, the major drive for growth continues to be agriculture and in the urban areas manufacturing and services sectors. He also discussed the overall economic indicators and the initiatives taken in the monetary policy by the State Bank of Pakistan.

Mr Aziz said the extra financial impact of the earthquake on government spending and development programme was absorbed due to improved fiscal situation and increased revenue generation.The earthquake necessitated tremendous rebuilding of the infrastructure and expenditure on relief and rehabilitation efforts in the earthquake affected areas, he added.

The prime minister said the investment climate in the country was improving and the trend was expected to continue and further accelerate, as investors become aware of the medium and long-term potential in Pakistan as an investment destination.

The IMF director said it was gratifying to note that he and his delegation were visiting Pakistan at a time when the prospect of its economy looked well, as Pakistan was set to achieve its growth target for the fiscal year 2006-07.

He said Pakistan's economy was in good health. He also expressed the hope that Pakistan's economy would continue to show steady improvement in the coming years to bring about improvement in the life of its people.