Pakistan economy on track but inflation looms: IMF

ISLAMABAD, May 11 (AFP): The International Monetary Fund said Saturday that Pakistan's economic reform programme remained broadly on track, but warned over rising inflation.

Pakistan received a $6.7 billion IMF bailout package last year to help the country achieve economic reforms, particularly in its troubled energy sector.

"The IMF is encouraged by the overall progress made in pushing ahead with policies to strengthen macroeconomic stability and reviving investment and growth," Jeffrey Franks, the fund's mission chief for Pakistan, said in a statement in Islamabad.

The IMF's Pakistan staff mission visited Dubai from May 1-9 to conduct discussions on the third review of the bailout package, which was approved by the fund's executive board last September.

The mission met senior officials from the finance ministry and the State Bank of Pakistan (SBP), weeks ahead of a scheduled $550 million fourth loan tranche that Pakistan is set to receive.

"Economic indicators are generally improving, with growth gaining momentum, external finance improving, and credit to the private sector rising," Franks said, but added that core and headline inflation were also rising.

The inflation rate currently stands at 9.2 per cent but the IMF wants Pakistan to "target an additional reduction in inflation towards their medium-term goal of 6-7 per cent in the next fiscal year", which starts on July 1.