The likelihood of another IMF programme

Federal Finance Minister Miftah Ismail while addressing a seminar organised by the Southern Regional Committee of the Institute of Chartered Accountants Pakistan stated that in the event that the government is unable to curtail the trade deficit the country will have to resort to another programme loan from the International Monetary Fund (IMF). There is no doubt that the trade deficit remains a source of serious concern and in this context it is relevant to note that, notwithstanding the claims by the Abbasi-led government that their policy decision to extend the export incentive package announced by the then Prime Minister Nawaz Sharif in January 2017 (considered the brainchild of former Finance Minister Ishaq Dar) as well as the two depreciations - in December 2017 and March 2018 - have impacted positively on the percentage rise in exports and at the same time registered a percentage decline in imports.
True that an overvalued rupee played a major role in making our exports uncompetitive and imports attractive and the export package contributed to higher exports yet what is relevant to note is that the trade deficit continues to widen given that our quantum of imports was much higher than the quantum of exports. Data uploaded on the State Bank of Pakistan website indicates that in December 2017 balance of trade was a negative 14.6 billion dollars, declining further to a negative 17.4 billion dollars by January 2018, to a negative 19.7 billion dollars by February and a negative 22.3 billion dollars by end March 2018. Exporters have appreciated the recent policy decisions by the government but claim that their input costs, including tariffs, are higher than those of their regional competitors and their sales tax refunds are around 200 billion rupees (a claim challenged by the Federal Board of Revenue) - two major impediments to export enhancement. In this context, Ismail's claim that "I am leaving the economy in order by May and if the next government (Caretaker) keeps the things as normal by June we will not be required to go to the IMF" is baffling.
Ismail also referred to IMF conditions as "extortion." Given this is his first stint as the finance minister he may not be aware of the fact that borrowing countries can and do negotiate the terms of any programme loan, and if they do not negotiate vigorously enough which was the case during the Extended Fund Facility programme with a focus on budget deficit reduction by increasing revenue rather than on expanding the tax net and poor performance by state-run sectors was dealt with by raising tariffs instead of improving governance.
Ismail's sustained attempt to show a positive state of the economy is backed by obviously flawed data for the current year due to patently evident lack of rationalization. In addition, the data is limited to the first eight months of the current year at best, given the government's decision to present a budget two months before the end of the fiscal year end-June, which implies a projection for the last four months of the year which is an even more over-ambitious projection than in years past given political considerations due to the imminent elections.
To conclude, this newspaper maintains that the actual as opposed to the current unrealistic data that will be available by the end of the fiscal year will be an outcome of the Abbasi-led administration's policies rather than any decision that the caretakers may take. While the caretakers are mandated not to take any policy decisions other than to carry on the business of government yet the establishment's insistence that an economist heads the caretaker setup to take mitigating measures given the state of the economy has led to some confusion as to what would happen during their two-month tenure, however, there is agreement that the caretakers maybe compelled to take some measures to deal with a crisis situation by end June.
Finally, one would urge Miftah Ismail to refrain from constantly using the pronoun "I" when referring to the state of the economy or indeed to policy decisions as all decisions are approved by the cabinet under the chairmanship of the prime minister.