“Bad days ahead,” warns Pakistani Finance Minister Miftah Ismail

Miftah Ismail said the government under Prime Minister Shehbaz Sharif was suffering because of the economic policies taken by Pakistan’s former Tehreek-e-Insaf regime led by ousted Prime Minister Imran Khan.

Miftah Ismail said the government under Prime Minister Shehbaz Sharif was suffering because of the economic policies taken by Pakistan’s former Tehreek-e-Insaf regime led by ousted Prime Minister Imran Khan.

Pakistani Finance Minister Miftah Ismail said on August 5 that the government would continue to limit imports over the next three months, as he warned of “bad days” ahead for the cash-strapped country. ‘silver.

Addressing a ceremony at the Pakistan Stock Exchange in Karachi, the minister said the government led by Prime Minister Shehbaz Sharif was suffering because of the economic policies taken by the former Pakistani regime Tehreek-e-Insaf (PTI) led by ousted Prime Minister Imran Khan. .

“Under the previous Pakistani Muslim League-Nawaz (PML-N) government, the country’s fiscal deficit was $1.6 trillion and in the last four years under Pakistan’s Tehreek-e-Insaf regime, this figure has increased. climbed to $3,500”, Geo TV quoted Ismail as saying. “No country can grow and be stable with this kind of current account deficit,” he said.

“When you increase the budget deficit and you also increase lending by 80%, it has a negative impact on the economy,” he explained.

“I will not let imports increase for three months, and in the meantime we will come up with a policy. I understand that the growth will be a little reduced but I have no other choice,” said the Dawn newspaper quoted the words of the Minister of Finance.

Pakistan’s import bill for the previous fiscal year was $80 billion, while exports stood at $31 billion. He noted that the current government must save the country from a possible default and must take immediate and short-term measures. “Maybe it was reckless in the long run,” he lamented.

“We are on the right track, but obviously we could see bad days. If we control our imports for three months, we can increase our exports by various means,” he said.

Speaking of the exchange rate, Mr. Ismail noted that outflows of dollars have exceeded inflows, which is why the rupee (Pakistani rupee) has fallen sharply against the greenback over the past month.

The Pakistani rupee rose 2.15 against the US dollar for the sixth straight session in intraday trading in the interbank market, to hit 224 against the greenback on Friday.

Since Mr Khan’s ouster in April, Pakistan’s currency has fallen to a historic low of 240 amid uncertainty over IMF aid.

Last week, New York-based rating agency S&P Global revised Pakistan’s long-term ratings from “stable” to “negative” due to soaring inflation and tightening global financial conditions.

Pakistan struck a staff-level deal with the IMF last month, followed by months of deeply unpopular belt-tightening by the government, which took power in April and effectively eliminated fuel and oil subsidies. electricity and introduces new measures to broaden the tax base.

The new government has cut a series of subsidies to meet demands from global financial institutions, but risks the wrath of an electorate already struggling with the brunt of double-digit inflation. Pakistan had hoped for a quick relaunch of the bailout, but the International Monetary Fund (IMF) has so far failed to release the much-needed tranche.

IMF Resident Representative for Pakistan Esther Perez Ruiz, following the staff-level agreement, said earlier this week that the country had met the last condition precedent – the development tax increase tanker – for the combined seventh and eighth reviews.

An initial $6 billion bailout was signed by former Prime Minister Imran Khan in 2019 but repeatedly stalled when his government reneged on grant deals and failed to improve ways significant tax collection. Pakistan desperately needs the IMF loan.

In July, the fund said it would increase the value of the bailout from $6 billion to $7 billion if approved by its board of directors, generally seen as a formality.

Mr Sharif has repeatedly blamed the former prime minister’s government, alleging that Mr Khan – a former cricket star turned Islamist politician – deliberately breached IMF terms in order to remain popular among his supporters at home.

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