IMF program likely to revive after budget: Miftah Ismail

Finance minister has said that staff level agreement with the International Monetary Fund is likely to be revived after the budget as we have taken difficult decisions.

Federal Minister for Finance and Revenue Miftah Ismail said this after launching the Pakistan Economic Survey 2021-22 alongwith Federal Minister for Planning and Development Ahsan Iqbal, Federal Minister for Energy Khurram Dastgir, MoS Dr Aisha Ghous Pasha.

He said that IMF program will likely to revive after the budget as the government shared everything with the Fund to ensure transparency and bridge the trust-deficit, he added. He also said that Pakistan is bound to make payment to Chinese independent power producers (IPPs) under the China-Pakistan Economic Corridor (CPEC) energy deals and government is giving only 17% rate of return to IPPs dispelling the notion of 34% return. China established energy related projects under the CPEC framework when no one was ready to invest one dollar in Pakistan so we thank to Beijing that they made investment in crucial times, Minister for planning also added.

Addressing on the Pakistan Economic Survey 2021-22, Miftah said that the economic growth of Pakistan has forecasted at 5.97pc as opposed to the target of 4.8pc in 2021-22.
When there is a growth in economy then balance of payment crisis also emerged adding that he said that import has been increased 48pc whereas an increase of Rs28% witnessed in Export due to which there is a trade deficit of $45 billion in this year.

Finance minister also said that the foreign exchange reserves of Pakistan would improve by $2.4 billion to over $12 billion by early next week. “The reserves would increase after China rolls over $2.4 billion,” Miftah added. In addition he said that the Brent oil prices in international market recorded 123 dollar due to which not only the government enhanced the petroleum prices by Rs60 but the price of every item has been increased.

While blaming former PM for giving subsidies, Finance minister said that we have made tough decisions due to which PML-N government saved Pakistan from the default.
Miftah Ismail said that the economy is on the road to stability but we would have to ensure sustainable growth as inclusive growth help in improving the economic situation.
Regarding giving tax exemptions to affluent class, Finance minister said that every government announce the tax exemptions to rich people as they established the industries which is important for country.

Miftah said there would have been no gas crisis in the country had the PTI government signed long-term agreements for LNG like the PML-N. About the foreign direct investments, he said the investments dropped to $1.25 billion in the outgoing financial year against last year’s $2 billion. The finance minister said that the tax-to-GDP ratio will remain at 11.1 per cent that should be around 15%.

He further said that Pakistan will need to allocate Rs3,900 billion for debt-servicing in the upcoming financial year. The Finance minister said that our government is also importing wheat from Russia as cabinet allowed to import 3 million matric ton wheat.

Federal minister for Planning, development and Special Initiative Minister Ahsan Iqbal attributed the growth witnessed in the outgoing financial year to rebasing of the economy by the PTI government last year.

He added that the former government slashed the Public Sector Development Budget (PDSP) to Rs500 billion from Rs1000 billion announced by PMLN government in 2018.
He said the private sector investment in Pakistan depended on the money invested by the government in the public sector development projects and regretfully, the PTI government did not release any penny in last quarter for development projects. Iqbal criticized the former government for damaging the CPEC projects adding that the PML-N government had established nine Special Economic Zones but the PTI government failed to start work on five zones in last three and half year.

He added that the PML-N has also expedited the work started by the PTI on dam projects. He added that industrial development, transport and communication were being focused on in the upcoming year.

Power Minister Khurram Dastgir said the PTI government failed to add electricity to the national grid during its rule. “Had the PTI government set up the required 8,000MW projects, there would be no power outages today,” he added.

According to Dastgir, K-Electric’s 1250MW project using coal produced in Thar was also delayed. The minister added that the government would install power plants that would use indigenous energy for production to ease the balance of payment crisis.

Replying the answers, Miftah said the economic growth through upgrading the agri sector would be sustainable and that the government would also increase the salaries of the state employees to offset the impact of inflation. He claimed that the government would not make any “unnecessary expenditures” and that it was available to be held accountable for budget expenditure. “We will definitely announce an increase in salaries of the employees amid a record increase in inflation,” he said, adding that the petrol quota of government high-ups had been slashed as well to cut down on expenses