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Islamabad, March 3
Cash-strapped Pakistan’s Finance Minister Ishaq Dar on Friday said his country has “never defaulted and we won’t now” as it awaited a much-needed USD 1.1 billion tranche of funding from the IMF.
Dar, who simultaneously blamed ousted premier Imran Khan for “sinking the economy”, said the incumbent government led by Prime Minister Shehbaz Sharif had made a principled decision to either save its own politics or the State during last year’s vote of no confidence which ousted the Pakistan Tehreek-e-Insaf (PTI) chief.
Addressing a press conference on the country’s current economic situation, the minister maintained that Pakistan’s interest was prioritised, which was the “correct decision”.
“We have never defaulted and we won’t now. Yes, we were in a precarious situation and are going through it currently,” the Dawn newspaper quoted Dar as saying.
Dar criticised the cricketer-turned-politician and asked him to reflect on his government’s economic performance instead of continuously talking about Pakistan defaulting. He added that the PTI was hindering the IMF agreement.
The minister continued that instead of uniting to steer Pakistan out of crises, the PTI chief was only worried about criticising the incumbent government. The finance minister added that such an attitude impacted the financial markets.
“Mismanagement and bad governance were the reasons for Pakistan’s current predicament,” he said.
Dar detailed the economic indicators from the previous PTI regime and compared them with the PML-N government’s performance and explained that gross domestic product (GDP) under the PTI was 3.5 per cent, whereas it was 4.7 per cent during the PML-N’s tenure.
Dar said that there was a 27 per cent per capita increase during the PML-N’s five years, as it increased from USD 1,389 to USD 1,768.
However, under the PTI the per capita income rose “only USD 30” going from USD 1,768 to USD 1,798, he claimed.
The minister also highlighted that the catastrophic 2022 floods, which left a third of Pakistan submerged and killed more than 1,200 persons, had an adverse impact on the economy, with a loss of more than USD 30 billion.
He said the foreign nations pledged half of the USD 16 billion needed for rehabilitation while the government was putting up the other USD 8 billion.
The floods destroyed crops, therefore increasing imports of materials that are not typically brought into Pakistan, such as wheat, lentils, and fertilizer.
He said that global inflation was a major reason for the inflation rising locally.
Commenting on foreign exchange reserves, the minister said reserves had reached USD 3.82 billion with the State Bank of Pakistan and combined with amounts held by commercial banks, came around to USD 9.26 billion.
The Pakistani rupee was in a freefall mode, sinking by Rs 18.98 on Thursday compared to the greenback and touching its historic low of 285.09 against one dollar by the end of the day.
The country is taking various steps to get aid from the global lender under a USD 7 billion loan facility, which the International Monetary Fund (IMF) is refusing unless crucial decisions are made by the government and implemented.
Dar on Thursday had said that a deal with the IMF was just around the corner.
“Our negotiations with the IMF are about to conclude, and we expect to sign a Staff Level Agreement with the IMF by next week,” he said, adding that all economic indicators were slowly moving in the right direction.
The Pakistani government has shown a willingness to take unpopular economic decisions like raising taxes, removing blanket subsidies, and artificial curbs on the exchange rate to secure IMF funding.
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