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Thursday June 13, 2024

'Best strategy' helped exit economic crisis: Ishaq Dar

Previous government "brought country to brink of default", finance minister says

By Business Desk
April 19, 2023
Finance Minister Ishaq Dar speaks during a press conference in Islamabad on February 10, 2023. — AFP
Finance Minister Ishaq Dar speaks during a press conference in Islamabad on February 10, 2023. — AFP

The Pakistan Democratic Movement (PDM)-led government's "best strategy" helped the country come out of the economic crisis, Minister for Finance and Revenue Senator Ishaq Dar said Wednesday.

The minister's comments at an event in Madina, Saudi Arabia, come as the $350 billion economy faces one of its worst economic and political crises, with a persistent threat of default.

Hitting out at the Pakistan Tehreek-e-Insaf (PTI), he said the previous government had "brought the country to the brink of default", but the current rulers "preferred" to save the nation instead of its votes.

"To all those chanting 'default, default', listen, Pakistan will never default," the minister said, noting that the government repaid $11 billion in debt in the last six months.

A major hurdle in the way of dampening the economic crisis is the stalled International Monetary Fund (IMF) programme that has been on hold since last year, which resulted in a pause in funds from bilaterals and multilaterals.

But doubling down on Prime Minister Shehbaz Sharif's statement, the finance minister said Pakistan has completed all the prerequisites for the IMF programme's resumption.

China has rolled over around $2 billion, while Saudi Arabia and the United Arab Emirates have confirmed their commitments of $2 billion and $1 billion, respectively, to the Fund.

Islamabad has been negotiating with the IMF since early February for the release of $1.1 billion from a $6.5 billion bailout package agreed upon in 2019.

To unlock the funding, the government has cut back on subsidies, removed an artificial cap on the exchange rate, added taxes and raised fuel prices.

The loan is critical for the struggling economy as the foreign exchange reserves have depleted to $4.03 billion, which provide an import cover of less than a month.