The warning has come from a visiting IMF delegation during its meetings with the economic managers of the government during the last couple of days. A four-member IMF delegation is currently in Pakistan for annual review of its economy.
Pakistan had come out of IMF programme few years back and its opinion or suggestions are not binding on the government for economic policy decisions. However, IMF under article IV of the memorandum reviews its economy annually. It can also suggest various measures to the government for corrections if necessary to maintain current level of economic growth.
Pakistan is eyeing over 7 percent economic growth for the current fiscal year and initial inflows and other economic indicators are pretty good to achieve the target. However, IMF apprehended serious implications for Pakistan if the political situation remained volatile and Pakistan's trade and investment keep on suffering for some more time.
Sources said IMF team had held meeting with Prime Minister's advisor on Finance Dr Salman Shah and many other important members of the government economic team and conveyed its concern to them over Pakistan' aggravating political situation.
The Fund suggested the government authorities that they should take all possible steps to make sure that the on-going political uncertainty comes to an end as early as possible.
Pakistan is also facing Herculean task of high inflation and widening current account deficit and IMF and other institutions had been suggesting the authorities to tackle these two economic issues on the long-term basis to improve their performance in these areas and protect low income and salaried groups. But this time their priority has changed from inflation and current account deficit to political situation.
Pakistan is facing political polarisation for the last six months and there seems no immediate end to this situation. It is hurting Pakistan very seriously. Other international donors such as the World Bank and ADB have also conveyed their concern on the issue and asked the government authorities to come with some immediate solution to the problem.