ISLAMABAD: The government is being urged to renegotiate macroeconomic indicator targets with the International Monetary Fund (IMF) in light of falling imports and a sharp decline in inflation in order to lessen the tax burden on the salaried class and the corporate sector and increase economic activity.
The first economic review under the 37-month, $7 billion Extended Fund Facility (EFF) will be carried out by the IMF team when they visit Islamabad next month. Inflation, large-scale manufacturing, and imports have all changed significantly as a result of falling global commodity prices, necessitating significant revisions to all key indicators.
According to statistics and background discussions with economists, lowering interest rates increases the burden on the government for servicing its debt. The source says that the State Bank of Pakistan is going to cut its policy rate for the fourth time in a row early next month, by 200 basis points, with the full effect being felt in the third and fourth quarters.
