KARACHI: The government should reject the demand of the International Monetary Fund (IMF) for ‘unwinding’ the two key measures related to promotion of housing and construction activities, an official said.

Association of Builders and Developers of Pakistan (Abad) Chairman Mohsin Sheikhani said that the suggestion of the IMF will further weaken the economy of Pakistan.

In a statement issued on Tuesday, Sheikhani said that according to a World Bank’s estimation for Pakistan, the real estate sector makes up 70 per cent of the national wealth and this industry contributes significantly to the GDP.

The World Bank’s report itself speaks of the reality of how our national economy is dependent on the real estate and construction industry, he said, adding that finance has remained a serious issue for the construction industry and if the IMF demand is accepted, it will be the last nail in the coffin of Pakistan’s struggling economy.

The government, foreseeing the need of housing in Pakistan, had announced to build 5 million low cost houses during the election campaign and after coming to power announced the Amnesty Scheme for real estate and construction (also gave status of industry to construction) with the facilities of bank financing on special rates of housing, he said.

The Abad chairman said that due to Covid-19, Pakistan’s economy has suffered in many ways but it does not mean that the main support for the economy itself be uprooted.

The IMF has put forward this demand to the State Bank of Pakistan (SBP) to wind down these measures “out of concerns for financial stability. Banks’ housing lending targets could present risks to financial stability”.

In the light of the World Bank’s report and need of housing, the government should reject the IMF demand and continue with the special measures for the real estate and construction industry because it is a fact that whenever any developed country faces recession, it gives top priority to the construction industry to stabilise the economy, he said.

In Pakistan slums or Kutchi Abadis are growing, especially in Karachi, where people are forced to live due to the lack of financing, the Abad chairman said.