KARACHI: Pakistan would be entering the International Monetary Fund (IMF) programme for the last time, said Finance Minister Asad Umar during a visit to the Pakistan Stock Exchange on Saturday.

He stated that the IMF programme was likely to be signed before or immediately after the winter break.

The minister held out the assurance that the government had made adequate planning to pay off external debts by February 2019 and the country would not be facing any problem if the release from the IMF was delayed.

The government was working on other options also besides the IMF, he said and added that during the current fiscal year the country had to pay $9 billion.

Mr Umar proclaimed: “The third year would be breakeven point after which the healthy growth would not require another IMF programme into which the country is entering for the 19th time.”

He forecast the financing gap (current account deficit) for the ongoing year at $12bn, signified by the drop to $1bn in average current account deficit of last two months from $2bn in the average of preceding three months.

Asad says adequate planning has been made to pay off external debts by Feb

He said the current account numbers would be released on Monday or Tuesday.

The minister said that the $12bn deficit would be mainly bridged by package of one-time inflows and trade finance restructuring. He said that the monetary measures had been taken and fiscal measures were ongoing. He said the government was aware of the fact that the adjustments were giving pain, but it was necessary if the economy’s health was to be restored.

Mr Umar said the government would be able to bridge the financing gap going forward through increased remittances, exports growth and import compression measures.

“Fundamentals are all moving in the right direction,” he said, adding that the first quarter figures show healthy growth in exports; downside in imports and a jump of 13pc in remittances.

In response to a protest by an importer over the recent taxation on luxury goods, the minister said that curbs on imports were necessary as he had to consider the good of 210m people of the country over that of a few importers.

“Importers had anyway made bumper windfall gains taking advantage of the rupee devaluation,” he asserted.

He observed that reducing the cost of doing business was on the priority list of the government.

The finance minister also held a meeting with the Board of Directors of the PSX after which he addressed and took questions from the brokers’ community, mainly dealing with the stock market.

He said that some of the measures suggested by the brokers appeared to be genuine demanding a correction while his ministry would have to study other issues before a decision could be made.

Among the demands put forth by the brokers and investors included the rationalisation of capital gains tax on stocks trading with other class of assets. It was also proposed to allow carryover of capital losses for up to three years, reintroduce the concept of holding companies tax structure for inter-corporate dividends to avoid double taxation and reduce the advance tax rate from 0.02 per cent to 0.01pc on stock exchange transactions, restoration of group taxation regime, abolition of compulsory payment of dividend on 20pc of the corporate profit earned and waiver of brokerage withholding advance tax.

Other suggestions included removal of embargo on foreign holdings of PSX shares, setting up a fund to divest government holdings in state-owned enterprises which would be available to the Pakistani diaspora and foreign investors.

The minister agreed to sympathetically consider the proposals.

The Pakistan stocks have been badly hammered in the last year and a half with the stock prices melting away by 30pc since the peak in May 2017.

Mr Umar said that the PTI government was endeavouring to create confidence among investors.

He did not agree that the number of investors in stocks had remained static at 250,000 over the years, contending that investors were entering through the mutual funds, which was a fast growing sector.

Published in Dawn, October 21st , 2018