Finance minister says national reserves will be increased to $16b before June 30 n Holds PTI responsible for current economic crisis n PTI govt enhanced country's debt from Rs30tr in 2018 to Rs54tr in four years n Claims PDM govt saved country from default by prioritising state over politics.
ISLAMABAD - Finance Minister Ishaq Dar on Friday ruled out the possibility of imposing economic emergency in the country and blamed Pakistan Tehreek-e-Insaf (PTI) for the current economic crisis.
Addressing a press conference here, Dar held PTI responsible for bringing the country on the brink of default. However, he claimed that the incumbent coalition government has saved the country from the default after prioritising the state over the politics. At the time of no-confidence motion in April last year against then prime minister Imran Khan, he said that the leaders of the coalition government had decided to keep aside all political interests in the wider interest of the state.
“There is no need for a financial emergency,” the finance minister said. He added that the government would succeed to manage the widening budget deficit.
He alleged that PTI led by its Chairman is spreading “fake news” regarding Pakistan heading towards default. “My presser today would be a reality check for Imran Khan,” Dar said. He went down hard on the PTI chief for continuous criticism of the coalition government. He said: “I am unable to understand whether he (Khan) has a problem in his leg or brain.” The Finance Minister termed Imran Khan’s attitude as selfish by saying the PTI leadership tried to sabotage the International Monetary Fund (IMF).
He once again made it clear that Pakistan would not default as it never happened in the past. Referring to Khan’s remarks about default, the finance minister said that the PTI chairman’s statements “adversely affect” the country’s financial markets. He assured the nation that the incumbent government has a roadmap and a policy to steer the country out of the economic crisis.
“Yes, we are in a precarious position as reserves held by the State Bank of Pakistan (SBP) depleted to $2.8 billion. Although the total national reserves were still at $9 billion as commercial banks were holding around $5.5 billion,” the minister said and added that Pakistan is expecting 1.3 billion dollars in financing from the Industrial and Commercial Bank of China in the coming days to help improve its foreign exchange reserves. He further said that he is confident that State Bank of Pakistan (SBP) held reserves will be increased to $10 billion while national reserves will be increased to $16 billion before June 30 this year.
Regarding the progress of negotiations with the International Monetary Fund for a bailout programme, Dar said all prior actions demanded by the Fund have been fulfilled.
He said that the unprecedented floods had caused losses worth over $30 billion in last year. He further said that the country needed over $16 billion for the rehabilitation of the flood affectees. He recalled that the country secured flood aid commitments of more than a targeted $8 billion at the International Conference on Climate Resilient Pakistan in Geneva. “Flood caused massive losses. Inflation during July 2022 -February 2023 was 26%. We cannot avoid it due to the floods.”
The Finance Minister said that Pakistan will escape the economic quagmire. We are making repayments to bilateral and multilateral lenders. We have made payments beyond our capacity. Speaking about inflation, Mr Dar said, “The entire world is witnessing inflation. Imran is also aware of the global situation.”
He compared the economic performance of two tenures of PML-N and PTI. Average Gross Domestic Products (GDP) growth during the PML-N tenure from 2013 to 2018 was 4.7 percent as against the PTI government’s average GDP growth was only 3.5 percent. Minimum food inflation during the PML–N tenure was 2.1% and that of PTI’s government was 6.1% and it peaked at 13.6% when they were ousted from power.
He informed that the PTI government enhanced the volume of country’s debt from Rs30 trillion in 2018 to Rs54 trillion, which was an exorbitant rise of 79% in four years. Mismanagement was the main reason behind this piling up of public liabilities, he added.
Similarly, he said the debt-to-GDP ratio was 63.6% in 2018 while it rose to 73% when the PTI government left. However, he said the current PDM government had improved the debt-to-GDP ratio by over 3% as it had come down to 69.7% now.
Ishaq Dar said the country’s external liabilities in June 2018 were US$95 billion while it jumped by $35 billion to $130 billion in June, 2022. He said for the first time in recent history, the supplementary budget was not meant for bridging the tax target set for a fiscal year but the main reason was to overcome the energy debts.
He said that the PDM government had to repay under the debt servicing valuing up to $5.5 billion due to which the foreign exchange reserves were depleted to low levels.