ISLAMABAD: Finance Minister Ishaq Dar said on Friday that Pakistan has neither defaulted in the past nor will default in the future.
Addressing a news conference here, he denied all reports suggesting that Pakistan might impose a fiscal emergency, calling the Imran Khan-led Pakistan Tehreek-e-Insaf (PTI) “fake”. criticized for spreading “news” that the country was headed for default.
“Why should I resign? The country is paying its debts. It has neither defaulted in the past nor will it default in the future,” he added.
However, Ishaq Dar admitted that Pakistan and the International Monetary Fund (IMF) have different estimates of the external financing gap in the range of $2 billion. He explained that seeking confirmation from bilateral friends was not part of the IMF’s ‘first steps’ to implement the staff-level agreement.
“We have exchanged the Memorandum of Economic and Fiscal Policies (MEFP) four times and now everything has been completed on our side with the hope of signing a staff-level agreement.
“The IMF needs to be given credit where it is due because the fund has pledged to help Islamabad fill the external financing gap,” Dar said.
Along with other members of the economic team, the minister cited various reasons including constitutionality, past practices, and ongoing census exercises, as well as the additional financial outlay of Rs 15 billion for holding general elections in pieces. I was told as a hindrance.
He said that I am not conducting general elections, but it is suggested that they should be conducted once for the entire country. The PDM leadership may decide to file a review petition against the recent Supreme Court ruling, but there have been instances in the past where elections have been delayed.
“In the latest scenario, the KP governor has made it clear that elections cannot be held due to the security situation, while in Punjab the governor and the Election Commission of Pakistan (ECP) will decide. The scheme of things is where people Counting is going on and how can elections be held on the basis of the previous census in two provinces while the general elections will be held on the basis of the new census.
He said that if separate elections are going to be held, then another 15 billion rupees will be required.
Without directly mentioning the involvement of the establishment, Dar said that the promoters of Imran Khan’s politics later themselves admitted that if he had continued to handle matters, it could have led to the disintegration of the country.
“My presser today will be a reality test for Imran Khan,” Dar fumed as PTI leaders called him out since the rupee had hit an all-time low of 285.09 a day earlier, while the February Inflation had reached a nearly 50-year high. 31.5%
Expressing his reservations over Khan’s continued criticism of the coalition government, he said: “I am unable to understand whether he (Khan) has a problem in his leg or in his mind.”
Dar said that instead of protecting the national interest, the PTI leadership tried to sabotage the International Monetary Fund agreement. “Khan’s attitude is selfish.”
Referring to Khan’s remarks about the default, the finance minister said the PTI chairman’s statements “badly affect” the country’s financial markets and he should keep his mouth shut. The Finance Minister said that the Industrial and Commercial Bank of China today confirmed the refinancing of the outstanding $1.3 billion loan through three different tranches of $500 million, $500 million and $300 million respectively, he added. Said China Development Bank has already refinanced. $700 million.
The minister said that the IMF has estimated an external financing gap of $7 billion as they have projected the Current Account Deficit (CAD) higher than the estimate of $5 billion, indicating That there is a $2 billion difference in outer space. He said that CAD was $3.8 billion in the first seven months and indicated that it will be around $400 million. Thus, it will increase to $4.2 billion in the eight-month period of the current financial year. Hence, overall CAD will remain lower than IMF estimates.
He said Pakistan had repaid $5 billion in commercial loans and was expected to refinance. He said that Pakistan has fulfilled all the requirements of the World Bank program loan to get $950 million within the current financial year under RISE.
He said that Pakistan’s external debt has come down from $130 billion to $126 billion by December 2022, hence the reduction.
Referring to the sharp depreciation of the rupee against the dollar and the hike in the policy rate by 300 basis points to 20 percent, he said the PTI-led government had made changes in the SBP Amendment Act so that the central bank to have autonomy and its affairs without the interference of the Ministry of Finance.
Ishaq Dar compared the macroeconomic data between the PTI-led government from 2017-18 to 2021-22 and said that inflation remained in single digits during the PMLN-led government during 2013-18. , while it increased. Double digit in PTI government. Today’s rise in prices was also a direct result of the poor policies that PTI followed during its rule.
He said, “I have been warning that there is no need to spend extravagantly beyond our means, but no one has heeded. I have warned that if fiscal discipline is not adhered to, we will have to ” “We can manage the budget deficit because it requires financing in rupees but there is a problem in the external account because it requires financing in dollars,” he said. Institutions are now providing all possible support to pull the economy out of the quagmire. “We need introspection to correct our past mistakes,” he said, adding that he had drafted the Charter of Economy in the previous government. was advocated to sign but no one paid attention at that time.
