Staff Report
ISLAMABAD: The International Monetary Fund (IMF) program is intact and a new mission is expected to arrive in August to review full year’s economic performance.
The government is committed to reforms and has made significant progress since the program was launched and subsequently put on hold because of Covid19, the spokesman of the Ministry of Finance and Revenue said while responding to the press conference by former Finance Minister Miftah Ismail on Sunday.
In March 2021, all missed reviews were completed and Pakistan has rendered a stellar performance under the Fund program, he said and added that the tax revenues were reaching to Rs 4,700 billion compared to Rs 3,862 billion left by the previous government.
He informed that reserves were increased to $23.4 billion as compared to $16.4 billion left by PML-N government and said, the Current Account deficit has been reduced from $20 billion to a surplus of around $1 billion in Jul-May 2021.
The primary deficit was left at 3.8 percent of GDP whereas the present government was succeeded to reduce it to 1.1 percent this year and budgeted at 0.6 percent amid difficult economic conditions.
After making adjustments of expenditures for Covid19 and settling past IPP’s circular debt, this primary deficit is also budgeted to turn to positive 0.1 percent. The spokesman said that interest rate which was 7.5 percent in July 2018, was brought down to 7 percent after making necessary adjustments because of the failures of monetary policy under PML-N regime. He said the failure of monetary policy has starkly reflected from the fact that during the tenure of Miftah Ismail as Finance Minister, there was complete breakdown in the government’s debt market because all borrowings were totally sourced from the SBP.
Consequently, the SBP debt owed by the government rose from Rs 1,400 billion on 30th June 2016 to more than Rs 5,000 billion by July 2018. It is therefore, useless to suggest that Pakistan has not done anything for the IMF program, the spokesman added.
It is curious to note that the Finance Minister of the PML-N government, who is solely responsible for pushing the country to seek a new program and destroyed Pakistan’s economy in just one-year by taking the current account deficit to $20b and depreciating the currency by 10 percent together with higher interest rates,
is checking the progress under the Fund’s program from the present government by casting doubts about the government’s commitment of reforms, he said and added that such behavior was the hallmark of PML-N politics.
While responding to a query that the World Bank has stopped provision of loans, he said there is absolutely no truth in this assertion and only yesterday, World Bank has approved a loan of $442 million.
Responding on the petroleum prices, he said that the government was highly conscious of insulating the consumers from the vagaries of changes in international prices, particularly the petroleum prices.
In the last one year, against an increase of more than 100 percent in international petroleum prices, the domestic prices have been increased by around 45 percent, he said and added that all this was due to sacrificing precious non-tax revenue just to prevent the people from over burdening.
