Amidst IMF review, PTI blames ‘N’ for crisis
ISLAMABAD: While the International Monetary Fund (IMF) has been reviewing the second tranche of $710 million for the country, the PTI has issued a White Paper blaming the PML-Nawaz-led coalition government for the economic catastrophe.
“[The] PTI government put the fast-dwindling economy of the country on the path of rapid growth despite Covid-19 pandemic that played havoc globally; however, the PDM government imposed through regime change conspiracy, reversed all the hard economic gains of Imran Khan-led government, inflicting more economic catastrophe to the country than the cumulative damage caused by floods, earthquakes and pandemic,” the White Paper stated.
White Paper alleges PDM govt reversed PTI’s economic gains
“The economic indicators clearly showed that when the PTI took over the government in August 2018, the economy was on the brink of collapse, as current account deficit (CAD) for FY2018 stood at $19.2 billion, SBP reserves were recorded at $9.4bn and $32bn loan payments were needed immediate funding. Moreover, the rupee was over-valued by 23pc against the USD, exports declined by $10bn over five years, while imports increased by $23bn, creating a hole of $33bn in our reserves, besides the fiscal deficit was 7.6pc of the GDP,” it stated.
The White Paper alleged that the PML-N left behind a mess in the energy sector by overbuilding the power supply through imported fuel plants with dollar-linked capacity payments. The circular debt inherited by PTI government was Rs1.6 trillion, and annual capacity payments were Rs450bn in FY18, rising to Rs1.4tr in FY23.
“…Pakistan approached the IMF that attached tough conditions to increase discount rate by 325bps, electricity and gas tariffs and fuel prices. The PTI government reduced fiscal deficit to 5.5pc of GDP by increasing taxes from Rs3.7tr to Rs5.5tr in a single year,” it stated.
It stated that despite facing the global commodity super cycle, which pushed prices of imported items such as petroleum products from $70/barrel to $115/ barrel, edible oil from $780/tonne to $1,500/tonne and coal from $80/tonne to $280/tonne, the PTI was successful in keeping CPI at 12.7pc and SPI at 14pc in March 2022, besides due to the proactive monetary and fiscal measures, CAD started reducing to under $1bn per month.
It alleged almost Rs20tr additional debt accumulated in 16 months, compared to Rs18.3tr by PTI in 40 months, despite the Covid-19.
Published in Dawn, November 12th, 2023
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