Islamabad rule out economic emergency, considers energy-saving measure
The International Monetary Fund (IMF) program is still a priority for the administration, according to a statement from the finance ministry, and negotiations to begin the program’s review have proceeded. “In recent days, a misleading message about alleged measures for an economic emergency has been making the rounds on social media.
The Finance Division vehemently disputes the claims stated in the aforementioned communication and explicitly asserts that no plans exist to impose an economic emergency, according to the statement.
It’s interesting to note that out of the nine suggestions made in the social media post, at least two were already being implemented in relation to import restrictions, while the State Bank of Pakistan advised that one concerning energy saving was actively being considered (SBP).
The ministry noted that the creation and dissemination of such false messages were against national interest during these difficult economic times. “Unfortunately, the message is aimed at creating uncertainty about the economic situation in the country and can only be spread by those who do not want to see Pakistan prosper,” the ministry said.
According to the finance ministry, “A cursory perusal of the nine things listed in the communication demonstrates how unrealistic such ideas are. Given the intrinsic strength and diversity of Pakistan’s economy, it was further said that it was extremely incorrect to compare Pakistan with Sri Lanka.
For the current fiscal year
Pakistan needs at least $32 to $34 billion to pay off its debt and close the current account deficit. The first four months’ foreign inflows remained at $4.2 billion.
According to the ministry, “exogenous variables including the commodities super-cycle, the Russia-Ukraine war, the global recession, trade headwinds, Fed’s hike in policy rates, and destruction caused by catastrophic floods” are mostly to blame for the current challenging economic emergency scenario.
The statement added, “Even in the face of the economic repercussions of record floods and needing to satisfy IMF conditionalities, the administration has been making every effort to mitigate the impact of such external causes.”
The government, according to the finance ministry, is still committed to finishing the IMF program and making on-time payments on all external debt. “With the assent of the federal cabinet, the administration has implemented a variety of austerity measures in this difficult economic climate. These actions, which aim to cut non-essential spending, are known to the general public, according to the finance ministry.
Similarly to this, the statement said that the administration had been thinking about energy saving as a way to lower the cost of imports. The first action mentioned in the social media message regarding the financial problem was energy saving.
According to sources, the SBP was pressuring the government to implement energy-saving policies, notably the early closing of markets and the reduction of fuel costs. The decision to relax the prohibition on some imports and replace it with higher regulatory taxes had increased pressure on the external sector.
The finance ministry stated that the federal cabinet will continue to discuss energy conservation and that all decisions would be made with the input of all relevant parties and in the interest of the country as a whole.
According to sources
The first action mentioned in the social media message regarding the financial problem was energy saving. According to sources, the SBP was pressuring the government to implement energy saving policies, notably the early closing of markets and the reduction of fuel costs. The decision to relax the prohibition on some imports and replace it with higher regulatory taxes had increased pressure on the external sector.
The finance ministry stated that the federal cabinet will continue to discuss energy conservation and that all decisions would be made with the input of all relevant parties and in the interest of the country as a whole.
The ministry asserted that the present administration’s efforts had put the IMF program back on track. In order to convey the appearance that Pakistan and the IMF were in fact discussing the ninth review timetable, it also said that “negotiations leading to ninth Review are currently at an advanced level.”
According to the ministry, recent government initiatives have reduced recent current account deficits and enabled the Federal Board of Revenue (FBR) to meet its revenue projections. In the foreseeable future, it was predicted that pressure on the external account would ease.
“While structural changes are still needed in the short term, the country’s economic position is currently heading in the direction of stability,” it was stated.
“Finance Division urges Pakistani citizens to support economic improvement and stability and not to pay attention to negative rumour-mongering, which is against Pakistan’s national interest.” Ishaq Dar, Pakistan’s finance minister, stated last week that he didn’t care if an IMF delegation visited the country.
