IMF programme likely to be revived soon: Hafeez Shaikh

ISLAMABAD: Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh has said that the IMF mission would visit Pakistan within the next few weeks and expressed the hope that the Fund program would be revived soon.

Addressing a press briefing along with Minister for Information & Broadcasting Shibli Faraz here at the Q Block on Tuesday, he also claimed that there was no increase in the public debt in the last four months, which stood at Rs36.4 trillion on June 30, 2020 and which hovered around the same figure on October 30, 2020. The claim regarding the public debt was made on account of windfall gains achieved through appreciation of rupee against dollar in the recent few months, so in rupee terms the public debt remained at the same levels in the last four months period. However, against the first four months when the country was witnessing budget deficit, this recovery could be simply termed just as jugglery of figures otherwise the government would have to borrow to finance its deficit, said independent economists.

However, Dr Abdul Hafeez Shaikh pointed out that “two main issues raising tax revenues and bringing reforms into power sector would be up for discussion during the upcoming IMF talks.” Dr Shaikh said that the food inflation was brought down in the last three weeks as the Pakistan Bureau of Statistics showed declining trends.

He said following shortage of wheat by 2 to 2.2 million tons, the government imported the commodity which brought down the prices of food items and now efforts would be made to further reduce the price hike.

He said the current account deficit was brought down from $20 billion to $3 billion last year. He said that the government paid Rs5,000 billion on account of interest payment on public debt in the last two years. He said that there was not a penny worth increase in public debt in the last four months and it stood at Rs36.4 trillion on October 30, 2020. “It demonstrates that the government was ensuring strict financial discipline,” he added.

He said that there were clear signs of economy picking up as the Large Scale Manufacturing growth stood at around 5 percent and cement dispatches stood at 16 to 20 million tons. The automobile, fertilizer and other sectors are achieving impressive growth. The textile orders were available till December 2020.

“The rupee has remained stable and our foreign exchange reserves touched $13 billion,” he said and added that the fiscal side of the economy also performed well whereby the FBR surpassed its four-month target and fetched Rs1,340 billion. He said the government paid back Rs 128 billion in refunds in the first four months against Rs50 billion during this period in the last fiscal year. In totality, the government had paid back Rs248 billion during the last fiscal year.

The external and internal front of the economy have improved, expenditures slashed down and no supplementary grant was approved for fiscal discipline, he said and added that the borrowing from the SBP was brought to zero. The expenditures of PM, President Houses and ministries were also slashed down while defence spending was frozen. “The primary balance has been achieved in the first four months of the current fiscal year,” he added.

All these measures, he said, were aimed at bringing relief for the common people. He said that efforts were underway for creating more job opportunities and he mentioned that construction package and Kamyab Jawan Program were launched with the allocation of Rs100 billion for providing loans to youth. The foreign direct investment, he said, fetched $733 million in the first four months of the current fiscal year. The 100 biggest companies earned profit by 36 percent while banks' profits went up by 56 percent. The Pakistan Stock Market performed very well in the whole of Asia and all these signs indicate that the economy was on the path of growth trajectory. He warned, however, that the second wave of Covid-19 pandemic was posing a risk for the economy.

Addressing the press conference, the Minister for Information, Shibli Faraz, said that 1.9 million tons of imported wheat would be reaching Pakistan soon, therefore, sufficient stocks are available and there would be no shortages of wheat and sugar. He lambasted the opposition and said that PM Imran Khan did not own any business, so he has no vested interests.

Regarding the GB elections, Shibli said if anyone has any complaints, he should approach the Election Commission. It is a childish behavior that after tasting defeat, one claims to march on to Islamabad. If Bilawal wants to continue his politics, he will have to bring maturity in his behavior, he added.