ISLAMABAD - Finance Minister Ishaq Dar on Monday ruled out the possibility of approaching the International Monetary Fund (IMF) for a fresh loan programme saying that “we have to make economy self-sustained”.

“There is nothing to worry as the State Bank of Pakistan’s held reserves are around $14 billion, which are satisfactory,” said Dar, speaking categorically for the first time since army’s comment on economic situation created a controversy.

ISPR, in collaboration with Federal Chamber of Commerce and Industry, organized a conference a few days ago where Army Chief General Qamar Javed Bajwa pointed out narrow tax base and some other weaknesses of country’s economy. His address was followed by ISPR chief’s commenting on the economy on a TV channel, which invited a sharp response from Interior Minister Ahsan Iqbal, who said the ISPR [army authorities] should refrain from commenting on economic issues.

This initiated a debate on the issue that whether the army should comment on country’s economic situation. Later both sides issued reconciliatory statements to defuse the situation.

Finance Minister Dar – who kept quite all this while – spoke on the subject at a press conference yesterday, amid reports that circular debt and other problems could force the country to seek loans from IMF and other institutions.

“My ministerial portfolio is a trust of my party and the prime minister reposes confidence in me and they will decide its (ministry’s) fate,” he said replying a question about giving resignation from his ministry for his being under a corruption trial.

Dar avoided sharing the exact amount borrowed by the incumbent government during the last four years.

He, however, said that the debt to GDP ratio has currently jumped to 61.6 percent from 60.2 percent in the year 2013.

Meanwhile, the share of external debt has reduced from 21.4 percent in 2013 to current 20.6 percent, he said.

“Pakistan’s debt to GDP is still low as compared to the United States, the United Kingdom, Japan, India and Sri Lanka,” he said.

“The government of Pakistan repaid $16 billion against the previous loans during the last four years,” Dar said while replying to claim that the government borrowed $28 billion in the last four years or so.

“The government’s resolve and focus continue to be on higher growth, which will reduce poverty, generate further resources and improve the economy and securities since the two are intertwined,” Dar said and added that the government was trying to achieve 6 percent economic growth in the current fiscal year 2017-18.

“There are no sanctuaries in Pakistan and Pakistan Army has done good work against terrorism,” the finance minister said. While talking about the Coalition Support Fund (CSF), he said that the government received only $550 million in the last fiscal year as against $1.2 billion of the previous year. “Therefore, the CSF issue is dry now,” he said.

He insisted that a lot of hard work needs to be done to take Pakistan ahead and for that “everyone must play their part”. Answering a question about the Chief of Army Staff’s concerns on the rising debt, Dar said that “we should not make the statement controversial as all the institutions are lying under Pakistan”.

Sharing the economic performance, Dar said that Pakistan’s budget deficit had recorded at Rs324 billion (0.9 percent of the GDP) during the first quarter of the ongoing fiscal year as against Rs438 billion (1.3 percent of the GDP) of the same period of the last year.

“The government has reduced expenditures to Rs894 billion during July-September of the year 2017-18 from Rs914 billion of the last year. Similarly, the tax collection had recorded growth of 20 percent and stood at Rs765 billion during July-September. The budget deficit has surged to 5.8 percent of the GDP during the last fiscal year as provinces failed to give the surplus budget,” he said.

The finance minister said that inflation had been contained and interest rates were lowest in decades. Exports had recorded 10.8 percent growth during July-September of the year 2017-18 due to incentive package announced by former prime minister, he said. Dar said that exports had enhanced to $5.17 billion as compared to $4.6 6 billion of the last year. On the other hand, imports had increased to $14.26 billion during July-September of the current fiscal year from $11.67bn in the same period last year. Remittances had increased to $4.79 billion as compared to $4.74 billion last year.  Foreign Direct Investments stood at $474 million during first two months (July-August) of the current year, showing over 150 percent increase from $179 million in July-August last year. Current account deficit has also improved slightly to $2.6 billion during July-August, he said.

“There is some confusion as if things have been on the decline in the past four years,” Dar said, adding that facts will speak otherwise. The country’s GDP growth had gone to 5.3 percent during the last fiscal year 2016-17, which was around 3 percent in 2013 when the government took charge. Inflation had been contained at 4.2 percent. Per capita income had increased to $1,629 in 2017 from $1,334 of 2013, he said.

Dar said that load-shedding would be eliminated from November or December this year. The circular debt is under Rs400 billion, which was over Rs500 billion when the incumbent government took charge in 2013. Meanwhile, load-shedding has been reduced to a large extent as compared to the 18-hour prolonged outages experienced in the past.

Dar cited the Pricewaterhouse Coopers (PwC) report, which has forecast that Pakistan will become the 16th largest economy in the world by 2050. “Morgan Stanley gave the country the emerging market status,” he said. 

He said that a recently published World Bank report had erroneously indicated Pakistan’s gross external financing needs at US$ 31 billion for the current fiscal year. He said that the report is based on a misinterpretation of the standard definition of the gross financing needs of the country. “Based on the international reporting standards, Pakistan’s actual gross financing need for the year 2017-18 is estimated at $18 billion (5.3% of GDP) rather than $31 billion (9% of GDP),” Dar said adding that the matter has been taken up with the World Bank to rectify the error.

adding that facts will speak otherwise. The country’s GDP growth had gone to 5.3 percent during the last fiscal year 2016-17, which was around 3 percent in 2013 when the government took charge. Inflation had been contained at 4.2 percent. Per capita income had increased to $1,629 in 2017 from $1,334 of 2013, he said.

Dar said that load-shedding would be eliminated from November or December this year. The circular debt is under Rs400 billion, which was over Rs500 billion when the incumbent government took charge in 2013. Meanwhile, load-shedding has been reduced to a large extent as compared to the 18-hour prolonged outages experienced in the past.

Dar cited the Pricewaterhouse Coopers (PwC) report, which has forecast that Pakistan will become the 16th largest economy in the world by 2050. “Morgan Stanley gave the country the emerging market status,” he said. 

He said that a recently published World Bank report had erroneously indicated Pakistan’s gross external financing needs at US$ 31 billion for the current fiscal year. He said that the report is based on a misinterpretation of the standard definition of the gross financing needs of the country. “Based on the international reporting standards, Pakistan’s actual gross financing need for the year 2017-18 is estimated at $18 billion (5.3% of GDP) rather than $31 billion (9% of GDP),” Dar said adding that the matter has been taken up with the World Bank to rectify the error.