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Govt rules out fresh IMF bailout

Updated September 14, 2017


ISLAMABAD: The Ministry of Finance on Wednesday denied that Pakistan was going to approach the International Monetary Fund (IMF) for another bailout package.

The ministry’s reply came in response to Pakistan Tehreek-i-Insaaf MNA Asad Umar’s press conference on Tuesday in which he highlighted the flaws in economic management by the PML-N government.

A spokesman of the ministry said the fear expressed that Pakistan would go back to the IMF for another bailout package is based on a false premise and incorrectly projected data. “There seems to be no need for any international programme including IMF for any bailout considering the debt dynamics have shown sustainability.”

The ministry said that the economic indicators were positive and had been acknowledged internationally referring to Asian Development Bank’s recent report which says Pakistan enjoys growth despite trade contraction.

He added that substantial progress had been made to bring potential taxpayers in the tax net during the last four years. As a result the number of income tax return filers which was around 766,000 in 2012 had risen to 1.26 million in 2016.

The external sector, which was under strain in last two years due to falling exports and declining remittances, has now started showing positive growth.

Exports witnessed a growth of 12.89 per cent in August over the same period of 2016. Workers’ remittances increased by 13.18pc during July-August and 26.8pc month-on-month in August.

Regarding taxation, the ministry said, the share of direct taxes in total taxes has increased over the years. The government is focused on further increasing the share of direct taxes through various policy and administrative reforms including broadening of tax base. The revenue collection has witnessed a substantial increase during last four years. The net collection increased from Rs.1,946 billion in 2012-13 to Rs.3,362 billion in FY 2016-17.

The spokesman said that the notion that the PML-N government borrowed record Rs10.8 trillion was incorrect. “The actual increase in the four-year tenure is around Rs.6.1 trillion, even if the year 2018 is added as projected, the total debt increase is expected to remain around Rs7.5tr.”

Published in Dawn, September 14th, 2017