Asad Umar, the federal finance minister of Pakistan tried to clear the confusion and uncertainty about the possible bailout package from IMF. The PM Imran Khan’s statement that the government might not seek the IMF program created lot of confusion. It is not yet clear that why the PM made such confusing statement when the economy is under pressure and government is looking for external financial help to deal with the economic situation.
The Prime Minister Imran Khan’s statement gives the impression that the PTI government is not seeking the IMF program. But the finance minister is saying something contrary to PM. Such contradictory statements give the impression that government has no direction as far as economic policies are concerns. There should be uniformity in the approach and public stance on the serious issues.
The minister said that the next International Monetary Fund (IMF) programme will be last to stablise the economy.
Asad Umar made these remarks during his visit to Karachi Stock Exchange to meet with major stockbrokers. He made it clear that despite problems, the Pakistani economy is on the road to recovery. He said that the government on October08 decided to approach the IMF for bailout package, calling it an ‘economic recovery programme.’
“There is tremendous [room for] growth in the stock market,” Umar told the market representatives but agreed that “measures need to be taken in order to improve the market’s [recent performance]”.
He assured the traders and brokers to take all measures needed to restore the confidence of the market. “We will work for the betterment of the capital market and improve the overall atmosphere for investment,” the minister vowed, but stressed that the stock market’s fortunes are directly linked with the economy’s health. “If the economy will grow, the market will grow.”
The finance minister defended his policies aimed at curbing imports, saying: “The country was heading rapidly towards bankruptcy. I have to save 210 million Pakistanis.”
According to a statement released by Ministry of Finance on October08, it said the government, after taking into account the current situation and consultation with the leading economists, decided to approach the IMF for stabilisation and an “economic recovery program”.
The statement explains that immediately upon assuming office, the present government had expressed serious concerns on the dire economic situation of the country and had committed to undertake a quick evaluation of all possible options.
“The government inherited 6.6% of fiscal deficit, more than a trillion rupees of unaccounted for losses in the energy sector and an unprecedented and debilitating current account deficit running at $2 billion a month. To correct the underlying imbalances, fiscal and monetary actions needed to be undertaken without delay,” reads the statement.
The government maintained that Pakistan has availed ten IMF programs since 1990s in one shape or the other but the challenge for the current government is to ensure that fundamental economic structural reforms are carried out to ensure that “this spiral of demanding in an IMF program every few years is broken once and for all”.
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25 August, 2019