Does Pakistan Need IMF? | MoneyCurve | USNEWS2

Friend or foe? A necessary evil or guiding light? The FPCCI’s recent report “Impact of IMF Pro­grammes: A Context of Pakistan” highlights Pak­istan’s IMF addiction.

Comparing key economic indicators in the years that Pakistan is under an IMF programme with the years that Pakistan is IMF-free, it states that most macroeconomic indicators tend to deteriorate when the country turns to the lender of the last resort.

Unsurprisingly, Pak­istan’s current account deficit is lower because of the curbs to restrict imports. This leads to a decrease in industrial growth and hence GDP while unemployment rises since many industries depend on imports for inputs.

However, Pakistan turns to IMF when it is on the verge of default and hence is in already bad shape. If a family can’t pay for food, the bank will not lend money for cars. If prudent measures were to continue without IMF, it is possible that the country would emerge from its boom-burst cycle.