No escape from IMF, says Tarin

PTI Senator and former finance minister Shaukat Tarin has said that they were making an emergency economic programme to get the country out of the current economic crisis, adding that his party would also have to approach the IMF and take tough decisions if they come to power in the next general elections.

Addressing a news conference in Lahore, the PTI leader projected that the economy would contract this fiscal and dismissed the government’s claim of achieving Gross Domestic Product (GDP) growth in the range of 1.5%.

He underscored that the country was showing negative growth in large scale manufacturing (LSM), agriculture and other sectors. He said under these circumstances, a positive GDP growth remained a distant dream.

While quoting the latest official figures, Tarin pointed out that the LSM registered minus 5 per cent growth in the last six months while exports and remittance showed a decline of 16 per cent and 19 per cent respectively, in December last.

“Moreover, for the first time, foreign direct investment (FDI) showed a significant decline in December 2022 as compared to the corresponding month a year ago. Recently the foreign investors withdrew their investment to the tune of $17 million from the country. Hence, money was not coming into Pakistan, rather it was leaving. As per the latest survey, foreign investors believe that Pakistan was on the wrong path and these sentiments have been reflected in the FDI figures,” he said.

“This has created a huge financial gap. The government was relying on heavy borrowing to plug it. In the last six months, the incumbent government has borrowed Rs6.5 trillion. In comparison, in its three-and-a-half-year tenure, the PTI government borrowed Rs19.3 trillion, but at that time the GDP had increased by 74%,” he said.

The PTI leader accused the coalition government of destroying the country’s economy, saying “the regime change operation has proved detrimental for our economy”.

He said the inflation stood at 12 per cent when their government was removed, adding that now it was touching 25 per cent.

“Businesses are closing in the country and the people’s income is decreasing. The shortage of dollars is delaying foreign payments and subsequently hurting our trade,” he added.

“Right now, banks are refusing letters of credit (LCs) due to a shortage of dollars. LCs worth $4-5 billion are pending due to which 5,700 containers are idle at the ports. Moreover, payments to shipping lines, foreign airlines, and profit remittances to the tune of 1.5 billion have been suspended,” he added

 “All (institutions and countries) have attached their inflows with the resumption of the International Monetary Fund (IMF) programme”.

Tarin quoted IMF as saying that Pakistan’s revenues were low while the country’s expenses were high. “Earlier, the government had committed with the IMF that the fiscal deficit would come down to around 4.6%, but our revenues have declined and expenses have doubled due to hike in the energy cost by Rs123 billion per month”.

“Hence, the IMF was asking the government to increase taxes to fill the financial gap. Moreover, they have an objection over the variation in the exchange rate of rupee and thus demanding of the government a market-based exchange rate,” he added.

Talking about the future, Tarin said that they were making an emergency economic programme to get the country out of the current economic crisis. “The plan would cover all the economic sectors”.

“We believe in long term inclusive and sustainable growth, and we had done this when we were in the government. We had proven that we could fix the economy by taking prudent policies,” he added.

He said if PTI comes to power they would have to go to the IMF and take tough decisions in the beginning to put the economy on the right path.