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More ADB Support Hinges on Upcoming IMF Talks: Country Director

The Asian Development Bank (ADB) Country Director for Pakistan Yong Ye expressed optimism about Pakistan’s economic future during an exclusive interview at the sidelines of the ADB’s 57th Annual Meeting in Tbilisi this week.

He expressed optimism about a new “successor program” from the International Monetary Fund (IMF), suggesting that ADB’s involvement hinges on the IMF’s response.

Ye highlighted the recent progress made by Pakistan under the IMF Stand-By Arrangement, including a significant increase in foreign exchange reserves which improved market confidence.

While acknowledging the country’s ongoing economic challenges, Ye noted positive indicators such as the successful repayment of a $1 billion Eurobond, narrowing deficits, and healthy remittances. However, he cautioned that fiscal deficit challenges persist due to high interest rates and high debt servicing costs.

Ye suggested improving regulations and transparency to attract long-term Foreign Direct Investments by helping repatriate profits and urged diversification away from sectors like real estate towards more productive investments.

Ye also acknowledged how the inflation rate had slowed and was hopeful for a reduction in the monetary policy rate, a move that would ease debt servicing and stimulate private-sector investment.

Ye also identified key areas for Pakistan’s long-term economic growth, including inflation control, lowering the fiscal deficit, and export diversification.

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