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ISLAMABAD: Finance Minister Asad Umar on Friday said an agreement with International Monetary Fund (IMF) for an economic assistance package would be signed by end of this month.
Talking to a group of media persons, the finance minister said the economic package would be finalised in principle with the fund during spring meetings (April 12-14) of the World Bank and IMF in Washington where he would hold discussions with the Fund authorities. This would be followed by an IMF mission’s visit to Pakistan to formally conclude a programme for signing.
The finance minister said he would share the medium-term macroeconomic framework with the Standing Committee of the National Assembly on Finance and Revenue on Monday to explain the government’s economic roadmap over the next few years. He further said he had committed to the parliamentary panel to strengthen the institution of NA’s standing committee.
Mr Umar denied reports that Pakistan had agreed to the devaluation of rupee with the IMF as claimed by former finance minister Ishaq Dar, saying the IMF had not even demanded currency depreciation. IMF discussions with the SBP are in progress on exchange rate management but not at all on fixing rupee-dollar rate, he added.
He reiterated that this programme would be Pakistan’s last programme and noted that the recent depreciation of rupee is being fuelled by speculations and fake news otherwise the SBP had announced in clear terms that rupee had achieved its equilibrium.
He advised people not to be misled by rumours to invest in dollar and instead invest in stocks and real estate that had reached their lower levels and would rebound.
He, however, explained that depreciation until a week or 10 days ago was due to increase in demand of the dollar owing to large current account deficit (CAD) of $19 billion. “This (increase) happens after every four to five years due to the current account deficit,” he said
During the last five year tenure of Pakistan Muslim League-Nawaz (PML-N), CAD increased from $2.5bn in 2013 to $19bn in 2018. The then government had taken the IMF programme owing to balance of payment crisis in 2013.
The situation was much worse in 2018 when CAD reached $19bn and was increasing at an average pace of $2bn monthly in the last three months of its tenure.
The finance minister said the top priority of the current government is to stop and reduce CAD. The government has been able to curtail the eight-month trade deficit to $21.5bn, from $24bn of the same period last year while CAD was contained to $8.5bn in eight months from $11bn of the same period last year.
The minister said there was no denying the fact that high inflation is affecting people but it is nothing when compared to the first eight months of the two tenures of the Pakistan People’s Party (PPP) and PML-N governments.
He said inflation had increased by 25 per cent in first eight months of PPP and 10pc in eight months of PML-N while it went up by 10.8pc during the same period of the current government.
The finance minister said foreign direct investment in first seven months of the PTI government maintained upward journey and stood at $1.441bn compared to $573m during the same period under the PML-N government.
According to Umar, when the government took measures for restructuring and straightening the fundamentals of national economy, the economic slowdown occurred, adding that it would gain the momentum and would be on path of growth soon. He said despite these challenges many sectors of the national economy were showing positive growth including industrial sector of the country as cement production grew by 1.7pc, urea production by 5.9pc, sale of automobiles by 4pc, and gas supply by 6pc.
The minister said previous government had presented fake figures of economic development including GDP growth, poverty, and other micro and macroeconomic indicators.
Published in Dawn, April 6th, 2019
