Washington DC (BBN) – The International Monetary Fund (IMF) has advised Pakistan for strengthening monitoring of the country’s banking system to check non-performing loan.
After a mission to Pakistan that ended on Friday the IMF said the country’s budget deficit and quasi-fiscal operations have contributed to a loosening of monetary conditions thus adding to inflationary pressures.
“To help counter these pressures, credit to the budget from the State Bank of Pakistan (SBP) should be reduced further. Moreover, the banking sector needs careful monitoring, given the high and rising level of nonperforming loans,” Head of the mission Adnan Mazarei said in a statement.
The statement also said: “Discussions on economic stabilization focused on addressing inflation, containing the budget deficit, reviving growth, and meeting the challenge posed by higher international oil prices.”
“Further, to lay the basis for higher and broad-based economic growth, tax reforms, reduction of poorly targeted subsidies, and financial sector reforms are needed to improve governance and promote higher savings, investment and growth,” it added.
BBN/SSR/AD-13Mar11-9:27 am (BST)