‘Never defaulted and we won’t now’: Pakistan’s finance minister grappling with financial crunch

Cash-strapped Pakistan’s Finance Minister Ishaq Dar said on Friday that his country has “never defaulted and we will not now” as it awaits much-needed funding of $1.1 billion from the IMF.

Dar, who accused ousted Prime Minister Imran Khan of simultaneously “sinking the economy”, said the current government led by Prime Minister Shehbaz Sharif failed during last year’s no-confidence motion to either save its politics or the state. An in-principle decision was taken for Pakistan Tehreek-e-Insaf (PTI) chief.

Addressing a press conference on the country’s current economic situation, the minister said that Pakistan’s interest was given priority, which was the “right decision”.

“We have never defaulted and will not do so even now. Yes, we were in a precarious situation and are currently going through it,” Dawn newspaper quoted Dar as saying.

Dar criticized cricketer-turned-politician Imran and asked him to consider his government’s economic performance instead of constantly talking about Pakistan defaulting. He said that PTI is becoming an obstacle in the IMF agreement.

The minister said that instead of uniting Pakistan to get out of the crisis, the PTI chief is only concerned with criticizing the present government. The Finance Minister said that such an attitude affected the financial markets.

“Mismanagement and bad governance were the reasons for Pakistan’s current plight,” he said.

Dar detailed the economic indicators from the previous PTI regime and compared them with the performance of the PML-N government and pointed out that the gross domestic product (GDP) under PTI was 3.5 per cent, compared to 4.7 per cent during PML-N’s tenure .

Dar said that per capita income increased by 27 percent during the five years of the PML-N, as it increased from US$1,389 to US$1,768.

However, per capita income increased from US$1,768 to US$1,798 under PTI.

The minister also highlighted that the devastating floods of 2022, which submerged one-third of Pakistan and killed over 1,200 people, had an adverse impact on the economy, with a loss of over USD 30 billion Happened.

He said foreign nations pledged half of the USD 16 billion needed for rehabilitation while the government was putting in another USD 8 billion.

The floods destroyed crops, so there was an increase in the import of materials that would not normally be brought into Pakistan, such as wheat, pulses and fertilisers.

He said that a major reason for rising inflation at the local level is global inflation. Commenting on the foreign exchange reserves, the minister said that the reserves with the State Bank of Pakistan had reached USD 3.82 billion and combined with the amount held by commercial banks came to around USD 9.26 billion.

Pakistani rupee was in a freefall mode, sinking 18.98 against the greenback on Thursday and touched its historic low of 285.09 against a dollar by the end of the day.

The country is taking several steps to get help from the global lender under a USD 7 billion line of credit facility, which is being rejected by the International Monetary Fund (IMF) unless key decisions are taken and implemented by the government Would have gone

Dar had said on Thursday that an agreement with the IMF is on the way.

“Our talks with the IMF are nearing completion, and we expect to sign a staff-level agreement with the IMF by next week,” he said, adding that all economic indicators are gradually moving in the right direction. Were staying

The Pakistani government has shown a willingness to make unpopular economic decisions such as raising taxes, removing blanket subsidies, and artificial restrictions on the exchange rate in order to secure IMF funding.

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