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Economy under severe stress, Miftah blames Imran

Miftah Ismail. Photo: The News/File
Miftah Ismail. Photo: The News/File

ISLAMABAD: Federal Minister for Finance Miftah Ismail Friday alleged that the national economy was under severe stress currently, and the Imran Khan-led Pakistan Tehreek-e-Insaf (PTI) government was responsible for it. 

He said the former coalition government, led by the PTI, left the economy on the brink of collapse, as they secured the highest-ever loans of over Rs20 trillion during its tenure.

In a statement issued here on Friday, he blamed dollar free flight against Pak rupee, Imran Khan’s deal with the International Monetary Fund (IMF) and then its violation, for an unprecedented inflation in the country. He said the country would have to be steered out of this quagmire, though it was really a tough job.

He also said that Imran Khan had created difficulties in bilateral relations with China and the Kingdom of Saudi Arabia, but now they had overcome all difficulties due to sincere efforts of Prime Minister Shehbaz Sharif.

Finance Minister Miftah Ismail said Imran Khan should respond to the crucial question why the rupee got depreciated from Rs115 to Rs189 against the US dollar during his tenure, as it caused a major price hike in the country. He said the PTI government’s corruption during its four-year tenure, rulers’ incompetence and rule of mafias led to sky-rocketing of prices during this period.

He said that the recent dollar surge and price hike were the direct result of the IMF programme and then breaching of the agreement. He said the agreement, signed by Imran Khan government, would have to be done away with and then the dollar and stock market would be stabilised. He said that Imran Khan had left the economy at a point that it would not be an easy task to put it back on the path of stability. He promised that he would stabilise the economy.

The finance minister said that the subsidy on petrol increased financial pressures on Pakistan. There was differential between the international prices of POL [petrol, oil, lubricant] products and on the rate it was sold by the government in the domestic market; so it caused loss of billions of rupees per month to the economy. Alone in this ongoing month, he said the government faced approximately losses of Rs120 billion, which stand three times higher than the expenditure of running of civilian government. The government, he said, cannot bear with such massive losses. “These are the causes of upheaval in different markets and price increase is on the rise,” he added.

If the government did not have financial resources, and it was forced to provide subsidy, there was no other option but to seek loans, he said and added that it was resulting in hiking the policy rate because the government was obtaining more loans from banks. The PTI had secured the highest-ever loans in the last three-and-a-half years, which was 80 per cent of the total loans. In the wake of increased loan liabilities, he said that the economy was facing immense pressures.

The minister said that the PTI-led government had left foreign currency reserves, held by the SBP, to the tune of $10.5 billion, which could meet import requirements of just 45 days. “It is a dangerous level of foreign currency reserves, which needs to be jacked up,” he added.

He said that the breach of IMF agreement increased Pakistan’s difficulties on the economic front. Imran Khan would have to be answerable for his government’s performance during the last four years. He hoped that the country would come out of the difficult situation and move towards the path of growth and prosperity.

Separately, PMLN Vice President Maryam Nawaz also blamed Imran Khan-led government for the current state of economy. “This is all your doing. Don’t think people are stupid. Answer for the worst performance in four years. You are responsible for bringing Pakistan and its economy to such a state. You will have to answer,” she said in a tweet.

In another tweet, she termed the PTI parliamentarians “liars and blood-suckers of the country”. She said they had tendered resignations but still they were getting salaries. “For what they were getting salaries: destroying the country, or violating the Constitution of Pakistan,” she asked.

Meanwhile, rupee lost more ground on Friday to close at record low for the fourth consecutive session after a persistent decline in foreign currency reserves reinforced concerns over the looming balance of payments crisis, traders said.

In the interbank market, the rupee ended at 192.53 to the dollar, down 0.39 per cent from 191.77 on Thursday. The rupee crossed the 194 level in the open market trade. It closed at 194.70 per dollar, compared with the previous close of 193.

“Investors were worried about the fast depleting forex reserves. There have been…

Read More: Economy under severe stress, Miftah blames Imran

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