Shaukat Tarin, adviser to the Prime Minister on Finance and Revenue said on Sunday that uncertainty pertaining to the International Monetary Fund’s (IMF) loan program for Pakistan will end soon, hinting there will be “good news” for the country.
Earlier this month, Tarin had announced that the government had reached an agreement with the IMF regarding the resumption of the $6 billion Extended Fund Facility (EFF) and a formal accord will be signed in a week. However, an update regarding this is still awaited.
Tarin while speaking at a gathering said that the IMF’s expected announcement of the EFF revival would also aid in halting the devaluation of the local currency.
PM’s adviser added, “Once the settlement with the IMF is reached, it will also rein in speculators causing the devaluation of the rupee”.
Tarin noted that speculations and the rising demand for dollars by the neighboring Afghan citizens had increased pressure on the Pakistani rupee (PKR).
The adviser expressed gratitude towards Saudi Arabia for providing Pakistan with $3 billion in safe deposits and $1.2bn to $1.5bn worth of oil supplies on deferred payments, adding that “it will be materialized in the next few days”.
According to reports, the government and the IMF had decided to exercise some flexibility in their respective stances pertaining to the issue of granting autonomy to the central bank.
As per reports, the IMF was not pleased to see Islamabad backtracking on its commitment of giving autonomy to the State Bank of Pakistan (SBP) leading to the lending agency to halt the revival of the loan program.
Tarin led Pakistan’s economic team, which had carried out multiple rounds of talks with the IMF officials to explain to them the numerical strength of the ruling party in the parliament which would be needed to pass the amendment regarding SBP.
Earlier on March 9, the federal cabinet green-lighted a bill aimed at granting more autonomy to the SBP regarding price control and combating inflation. The autonomy was also connected to the adoption of exchange rates as well as monetary policy in a manner that does not require the government’s intervention. The decisions made by top officials of the SBP will not be questioned under the proposed law.
The two leading opposition parties in the country announced that they will block the bill in the parliament.
‘No concession in oil prices’
Regarding the rising prices of petroleum products in Pakistan, Tarin said the local prices were directly proportional to the rates in the international market. He said, “There is no concession in it. Whatever [hike] comes will be passed through [to the public].
He added that the government had only passed 34pc of the global price hike to the common man, as it is absorbing nearly 60pc of the burden itself.
He remarked that the government was implementing a strategy to fix the economy, “We are aiming for sustainable growth so that the poor segment may also get the benefits of it.”
The finance adviser forecasted an over 5pc growth in the economy in the ongoing fiscal year saying that revenue had seen an increase of 36pc, while agriculture has seen bumper crops and large-scale manufacturing’s growth in double digits. “It shows that our economy is growing by more than 5pc.”
He added, “We have 32pc growth in income tax, and our growth is all-round including covering sales tax, income tax, and customs. We will try to up revenue target to 11pc from 9pc and then 14pc after it”.
Tarin shared that the government had sought assistance from economist Dr. Ishrat Hussain to identify factors hindering the growth of the national economy. “Dr. Hussain came up with multiple reasons, including meager saving rate, huge import-export gap, and below-par economic productivity.”
Tarin also attributed the surging food prices to disruptions induced by the pandemic.
He added, “The prices of food jacked up internationally. We import some important food items and our common man is affected due to its soaring prices. The purchasing powers in other countries are good, but we have a problem in that area. We are trying to fix it,” he added.
