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Asad rules out possibility of default on debt

Updated January 11, 2019

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Finance Minister Asad Umar claims that due to some important decisions being taken by the government to strengthen the economy, Pakistan is better placed to negotiate with the International Monetary Fund. ─ File photo
Finance Minister Asad Umar claims that due to some important decisions being taken by the government to strengthen the economy, Pakistan is better placed to negotiate with the International Monetary Fund. ─ File photo

ISLAMABAD: Finance Minis­ter Asad Umar has ruled out the possibility that the country may default on repayment of debt and claimed that due to some important decisions being taken by the government to strengthen the economy, Pakistan is better placed to negotiate with the International Monetary Fund.

Talking to anchorpersons here on Thursday, he said the country was not solely relying on the IMF for economic relief as alternative arrangements were available, adding that talks were under way with the IMF, but at the same time steps were being taken to get funds from alternative sources too.

“The government will sign an agreement with it [IMF] in case of any attractive programme,” the minister said without giving a direct answer to a question whether or not Pakistan was having another IMF programme. He said the IMF had not placed any non-financial condition during the negotiations and it was just an option to revive the economy.

Finance minister says country is better placed to negotiate with IMF

Mr Umar claimed that with an increase in exports and remittances and a reduction in imports, the country’s trade deficit had come down from $2 billion per month to $1bn. “This figure too is unsustainable and we are trying to further reduce it,” he said, adding that gap between external payments and foreign reserves had been covered.

The finance minister declined to comment on the value of dollar in near future, but said the situation would stabilise soon in the wake of measures taken by the government. He said the pressure to rush for a deal with the IMF had eased due to combination of efforts — financial supports from friendly countries and economic measures taken by the government.

The minister said that during the first five months of the Pakistan Peoples Party government in 2008, inflation had touched 11.2 per cent and during the same period of the Pakistan Muslim League-Nawaz government in 2013, it increased by 4pc. But, he added, inflation increased 0.4pc during the first five months of the Pakistan Tehreek-i-Insaf government.

“Besides there is one point that you all miss — due to the measures taken by us the inflationary impact is higher for the top tier income slab of society and almost negligible for the lowest earning group,” Mr Umar said. “Previously, the impact was almost equal for all income groups.”

He said the increase in power and gas rates was applicable to the affluent and not the underprivileged of society.

The finance minister declined to talk about issues of circular debt and gas supply on the grounds that it was a domain of the power minister.

He said concrete measures were being taken to attract foreign investment in the country, which would strengthen the economy on a long-term basis.

Published in Dawn, January 11th, 2019