Front Matter Page

IMF Country Report No. 17/213

PAKISTAN

SELECTED ISSUES

July 2017

This paper on Pakistan was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed on June 1, 2017.

Copies of this report are available to the public from

International Monetary Fund • Publication Services

PO Box 92780 • Washington, D.C. 20090

Telephone: (202) 623–7430 • Fax: (202) 623–7201

E-mail: publications@imf.org Web: http://www.imf.org

Price: $18.00 per printed copy

International Monetary Fund

Washington, D.C.

© 2017 International Monetary Fund

Front Matter Page

PAKISTAN

SELECTED ISSUES

June 1, 2017

Approved By

Middle East and Central Asia Department

Prepared By Tasneem Alam, Giorgia Albertin, Abdullah Haron, Maxym Kryshko, Tokhir Mirzoev, and Hiba Zaidi

Contents

  • POVERTY, INEQUALITY AND SOCIAL SAFETY NETS IN PAKISTAN

  • A. Poverty and Inequality in Pakistan

  • B. Social Safety Nets, Targeting and Outcomes in Pakistan

  • C. Frontier Analysis: The Efficiency of Social Safety Nets and Social Programs in Pakistan

  • D. Policy Recommendations and Conclusions

  • BOX

  • 1. A Large Informal Economy Constrains Inclusiveness in Pakistan

  • FIGURES

  • 1. Poverty is High and Children’s Malnutrition is Widespread

  • 2. Challenging Education and Health Outcomes amid Limited Public Spending

  • 3. High Inequality Across Many Dimensions

  • 4. Lower Spending on Social Safety Nets and Higher Poverty and Inequality

  • 5. Lower Social Spending in Education and Health and Weaker Outcomes

  • References

  • SUPPORTING GROWTH AND INCLUSION THROUGH FINANCIAL DEVELOPMENT

  • A. Introduction

  • B. Financial Development and Inclusion: Where Do We Stand

  • C. Quantifying the Effects of Financial Development on Economic Growth

  • D. Policy Implications and Considerations

  • BOXES

  • 1. Pakistan Financial Sector Snapshot

  • 2. Measuring Financial Development and Inclusion

  • 3. Islamic Banking

  • 4. Progress on Financial Inclusion Initiatives

  • FIGURES

  • 1. Pakistan’s Financial Sector: Peer Comparison and Bank Lending

  • 2. Progress in Financial Sector Development and Inclusion

  • 3. Financial Institutions Index: Pakistan vs Peers and Region

  • 4. Depth of Financial Institutions’ Development

  • 5. Efficiency of Financial Institutions

  • 6. Access to Finance

  • 7. Financial Inclusion

  • 8. Aspects of Financial Inclusion

  • 9. GDP Growth Dividend from Higher Financial Development and Inclusion

  • TABLES

  • 1. Benchmarking Non-Bank Financial Institutions

  • 2. Benchmarking Efficiency of Banks

  • 3. Finance and Growth Regressions–GMM Estimation

  • References

  • FISCAL DECENTRALIZATION AND MACROECONOMIC CHALLENGES IN PAKISTAN

  • A. Introduction

  • B. Imbalances in Pakistan’s Fiscal Federalism Framework

  • C. Macroeconomic Outcomes Since the 7th NFC Award

  • D. Considerations for the Next NFC Award

  • BOXES

  • 1. Main Aspects of Pakistan’s Fiscal Framework Post-18th Constitutional Amendment

  • 2. Provincial Revenue Mobilization

  • 3. Provincial Authorities’ Feedback

  • FIGURES

  • 1. Macroeconomic Framework in the NFC Report and Actual Outcomes

  • 2. Social Outcomes Before and After the 7th NCF Award

  • 3. Federal and Provincial Expenditure on Health and Education

  • References

  • THE MACROECONOMICS OF PAKISTAN’S QUEST FOR ENERGY AND THE CPEC

  • References

Pakistan: Selected Issues
Author: International Monetary Fund. Middle East and Central Asia Dept.