ISLAMABAD: The International Monetary Fund (IMF) Middle East and Central Asia director, Jihad Azour, said on Tuesday that Pakistan’s measures to bring in fiscal reforms was “headed in the right direction.”

An eight-member delegation of the IMF reached Pakistan on Monday to review the country’s economic progress during the first two months of the current fiscal year after entering a $6 billion loan deal with the Fund in July, Pakistan’s Ministry of Finance said.

The Fund’s program aims to support “the authorities’ economic reforms program” and help reduce economic vulnerabilities and generate sustainable and balanced growth.

During a press conference held in Islamabad on Tuesday along with finance adviser Abdul Hafeez Shaikh, Azour said the program had got off to a good start, adding that targets could not be revised after only three months of the program’s commencement.

"No changes are being made for the time being to the program's targets," he said while acknowledging the efforts made by Pakistan in bringing stability to the country’s economic imbalance. 

In the backdrop of recent attacks in Saudi Arabia on Aramco's oil facilities, Azour said that "an uncertain future” lay ahead for countries importing oil for the production of energy, and they would have to “reduce their reliance.”

On Monday, Hamid Raza, Director-General Ministry of Finance, told Arab News that the IMF delegation would “review the program as per schedule and remain in Pakistan till September 20.”

Islamabad entered into a three-year program with the IMF in July this year to stave off a balance of payments crisis and resuscitate the country’s ailing economy. The country has already received the first tranche of $1 billion out of the $6 billion package.

Addressing the media, the finance advisor said the first two months had seen an improvement in interest rates and exchange rates, and said institutional reforms were also being introduced.

The IMF-supported program is to be monitored and reviewed according to a calendar of quarterly reviews. But Azour said the IMF delegation would visit Pakistan again in October or November for a review session.

Economists have said the government’s failure to achieve targets set by the IMF for fiscal deficit and revenue in the first two months of the fiscal year had pushed the Fund to send a staff-level delegation to Islamabad to review economic results before the scheduled quarterly review. Both Pakistan and the IMF insist however, that the visit is “routine.”

“The last financial year closed with fiscal deficit of 8.9 percent of the GDP against the government’s target of 7.2 percent, resulting in a slippage of Rs. 686 billion,” Dr. Vaqar Ahmed, a senior economist, told Arab News.

Likewise, he said the Federal Board of Revenue (FBR) has recently revealed it would not be able to achieve a revenue target of Rs. 5.5 trillion set for this financial year. “These are the basic factors that have pushed the IMF for an early review [of the economic indicators],” he said.

The Ministry of Finance has said that the IMF staff-level visit was planned “much earlier” and that it is “absolutely erroneous to construe” otherwise.

Last week, IMF spokesperson Gerry Rice said that Pakistan needed to mobilize domestic tax revenue to fund social and development spending while simultaneously keeping its debt on a “firm downward trend.”