Daily Times

ISLAMABAD: Interim Finance Minister Dr Shamshad Akhtar Tuesday said that the caretaker government won’t approach the International Monetary Fund (IMF) for a fresh bailout.

Flanked by caretaker Information Minister Ali Zafar during a press conference, Dr Akhtar said: “We don’t have any intention to hold negotiations or sign an agreement with the IMF.”

The finance minister said it was necessary that the caretaker government reflected on medium-term macroeconomic stability framework and for this purpose it could consult any domestic or international stakeholder for feedback.

She said that consultations with relevant ministries were being held to look how to overcome macro-economic challenges in short-term and how they should be dealt on long-term basis.

To a question, she said that government was reflecting on debt repayment mechanism keeping in view its reserve position and working to arrange alternative sources of financing.

Talking about the hike in petroleum prices, the minister said that there was an institutional mechanism in place, which had determined petroleum prices in a systematic manner by utilising a set formula.

Principally, she said, that the oil prices of Pakistan were linked to the international Arab Gulf market prices. She said that oil prices volatility was a reality and every government had to adjust prices accordingly.

She maintained that oil prices in Pakistan were lower as compared to the regional countries, including India and Sri Lanka.

Talking about the condition of economy, she said that the real Gross Domestic Product (GDP) had witnessed strong growth of 5.8 percent, saying that the current financial year would close on the same growth rate.

She expressed satisfaction that the growth had been broad-based as every sector, including agriculture, industrial, services and supply sector contributed to the growth.

She said that the inflation had also been contained to manageable range, though there had been some increase in core inflation, and added that the increase in oil prices and adjustments might lead towards upward trend in inflation.

The minister said that the current account deficit was among serious problems the country was facing.

The target of current account was also missed and it slipped 1.6pc of GDP, citing slow export growth one of the reasons for this negative trend.

However, she said that the exports from the country had been witnessing increasing trend, which was a positive sign.

She said that the exports from the country were recorded at $20.6 billion against the imports of 45.5 billion, showing gap of over 24.9 billion.

“Second challenge was fiscal deficit, which had touched 6.1 figure against the target of 4.1 percent, hence running above the targets.”

The third issue is debt issue, as the public debt has been growing at fast pace and reached to significant level of 70 percent of GDP against 64 percent in 2013.

She expressed concern that the public debt was not consistent with federal debt limitations which is over and above that.

Finally, she said the public sector entities were a problem, stressing the need for structural reforms overcome these losses.

To a question, she said that circular debt was off budget item and it would remain same.

When asked about depreciation in Pakistan rupee value, she said that the exchange rate should be determined by market forces. Let the interbank market operate.

“The government will only intervene if there are speculations in the exchange rate.”

She said that the revenue collection could also be short of target and said that the target fixed was optimistic, which should be realistic.

Published in Daily Times, June 13^th 2018.