Default risk won't be over even if Pakistan secures $1bn tranche from IMF: Miftah

Former finance minister Miftah Ismail believes that the default risk looming over Pakistan may not be over even if it secures the $1 billion tranche from the International Monetary Fund (IMF) as part of the $6.5 billion bailout.

Ismail, while speaking during Geo News programme Aaj Shahzeb Khanzada kay Saath, said that whichever government comes to power after the elections will need to secure a fresh bailout from the Fund.

The former finance minister said the IMF's forecast of Pakistan’s current account deficit reaching $8 billion is "unfair". He also added that the friendly countries were angry with Pakistan as it does not do what it says.

Earlier while commenting on the rupee’s downfall against the dollar, Ismail said that it was a bad day for Pakistan’s economy that the rupee had reached close to 300 against the dollar and the interest rate had reached 20%.

While indirectly criticising his successor Ishaq Dar, the Pakistan Muslim League-Nawaz (PML-N) leader lamented that holding the dollar artificially at 240 was not needed especially at a time when the government did not have funds.

“When you leave the dollar to the free market on the IMF’s condition, it jumps from 230 till 260. Then you decrease the price of petrol and in two days it rises again by Rs30. This is not a serious economic policy but a joke with the economy,” said the former finance minister.

The PML-N leader further said that if the government wanted to hold the dollar at Rs180 artificially then it should have stopped it at Rs12.

“If you can set the rate on your own, then make it Rs10 or make one dollar equal to Rs1, this is all ridiculous,” said Miftah.

While recommending a prescription to the government, the former finance minister said that the first thing that needs to be done is to secure the deal with IMF. He also added that there is a need to increase the average wage of workers so they can survive in this inflation.

“The income of those whose salary is 100,000 will also have to increase, inflation will also increase but we have to do all this,” said Miftah.