Finance Minister Miftah Ismail has expressed hope of returning with good news from Doha, where he would negotiate with the International Monetary Fund (IMF) over the next two days to resume the loan program.
Talking to the media at the Karachi Airport, before departing for Doha, Ismail expressed hope that an agreement with the Fund would be reached within two days and he would return with good news.“
He however hinted that the government has no plans to remove the subsidies given on the prices of petrol and electricity, adding that he would try to convince the IMF that Pakistan cannot afford to do this.
“Give me some break. I cannot remove subsidies [on petrol and electricity prices]. The nation cannot afford it.”
He also criticized the former Finance Minister Shaukat Tarin for claiming that he left the money to fund these subsidies, adding that Tarin used to be a technocrat till this age, but now he talks like Imran Khan’s young supporters.
Ismail said before becoming the finance minister, he received a presentation from the finance secretary. According to it, the previous government left a primary deficit of Rs5600b for the federal government.
“You didn’t leave any money so stop lying,” he said to Tarin.
Talking about the current year’s projected growth at around six percent, Ismail said the figure of 5.97percent growth was only achieved when the previous government modified the formula to calculate the growth.
“The IMF is saying that the economy is growing too fast [at six percent] that is leading to the current account deficit,” said the economy.
He added that the IMF wants the economy to be slowed down, and they want it to be done by hiking the interest rate.
Criticizing the performance of the previous government, he said former Prime Minister Imran Khan left economic landmines everywhere – be it the current account deficit, record imports or Rs20,000b borrowing, which he claimed was 80percent of the loans taken by all former prime ministers of Pakistan.
He also said that the former prime minister was the reasons that the talks with the IMF were not taking place in Pakistan, adding that the global lender didn’t want to come due to the political uncertainty and the upcoming PTI long march.
Replying to Tarin’s claim that the current government sought his help to fix the economy, Ismail said there was no hope of any help from some one who left the economy on ventilator.
“I would ask everyone to check the balance sheets of Silk Bank and Candyland and then decide who knows how to run the economy.”
Talks between Pakistan and the IMF
The talks between Pakistan and the IMF have been taking place in Doha to resume the $6b loan program, and extend the facility by $2b to $8b. A technical team comprising the finance secretary, acting State Bank of Pakistan governor, and other officials was in Doha since last week for the talks.
Foreign ministry sources told SAMAA TV that the Pakistani team has not only assured the IMF of the government’s willingness to take tough decisions but also shared the details on its move to ban imports of non-essential luxury items including cars and mobile phones.
However, the talks were stalled as Pakistan failed to meet the preconditions set by the IMF to resume the program. Both sides have failed to agree on economic targets and a framework of the Budget 2022/23. IMF also wants Pakistan to collect Rs7225b in taxes in the next fiscal year.
If talks with the Fund were successful, Pakistan would get a loan tranche of $1, which would help shore up Pakistan’s depleting foreign exchange reserves and plug the current account deficit.
On May 19, the federal government imposed a ban on the import of 38 non-essential luxury items to bring down the import bill