ISLAMABAD: Finance Minister Ishaq Dar on Thursday blamed the previous government’s “failure to meet obligations” for the IMF program’s delay.
He claimed the present government was doing its utmost to fix the economy and finish the IMF programme. He said the country was “quite close” to finalising a staff-level deal with the IMF to avert a balance-of-payments catastrophe.
An agreement would release $1.1 billion from the IMF’s 2019 $6.5bn bailout package. According to the economists, this package is crucial for Pakistan to prevent a foreign debt default.
“We seem to be very close to signing the staff-level agreement, hopefully, God willing, in the next few days,” Mr. Dar said at a seminar organised by the Ministry of Finance in Islamabad.
“I and my team are hopeful to finish this program as soon as possible,” he stated.
Mr. Dar said the budget 2023-24 would include measures to lift the country out of the morass the current government inherited and back on track with strong and sustained economic growth.
Dar stated the Pakistan Democratic Movement (PDM) coalition government inherited a failing economy. FM claimed the previous government signed the IMF agreement then reversed its criteria.
Ishaq noted, “This caused a lot of trust deficit” with the international community because these were sovereign state promises.
Due to the trust deficit, Mr. Dar said the current bailout took longer than prior ones.
Ishaq Dar said energy sector reforms, which had more than Rs4 trillion ($14.18 billion) in debt, were most important. He stated the power sector needed structural restructuring and fixing.
He said that “we are now in a position to move forward with complete confidence”. “Moreover, the country had the strength and resilience to tackle the issues”.
PML-N completed IMF program
He said the only IMF programme Pakistan ever completed was during PML-N’s tenure and even the powerful military dictators could never go beyond ninth or tenth reviews of the lender’s programme.
The finance minister said Pakistan was passing through very challenging times and all have to make contributions to come out of the quagmire the present government inherited.
To achieve this, he said the government had already announced austerity measures under which the prime minister has banned the purchase of all vehicles and all other new durable items until June 2024 on top of a 15pc cut on current and non-employee expenditure at all the ministries, divisions and attached departments.
Luxury vehicles from the cabinet members had been withdrawn and the cabinet members would be bound to travel economy class and not to stay at five-star hotels anywhere at home or abroad.
However, this was followed by devastating floods that caused over $30bn losses and damages to the economy and the federal and provincial governments had to make available Rs452bn for relief and rehabilitation activities.
