That a policy appeasement is often counterproductive with the International Monetary Fund (IMF) is a fact. Although the incumbent government has gone to great or extreme lengths, the IMF is said to have still expressed its concern about the country’s budget.
“There are still some concerns the IMF has about our budget and numbers and stuff like that,” Ismail has reportedly said in an interview at his office in Islamabad. According to him, the IMF is still concerned about fuel subsidies, a widening current account deficit, and the need to raise more direct taxes.
How disturbing it is that this government has cut subsidies in the last two weeks. IMF’s conditionalities are actually strangling the Pakistani nation. How many more cuts will this government impose as conditions of IMF support without bringing its own house in order? It is heartening to note that the government has sharply lowered the fiscal deficit target to 4.9 percent of GDP, which indicates a fiscal contractionary approach to economic challenges.
What it further requires to do is that it must lower 5 percent growth target to 4.5 percent. What more it must do is to privatise all loss-making state-owned enterprises (SOEs) without any further loss of time and reduce its current expenditure by half, if possible.
Mehtab Khan (Islamabad)
Copyright Business Recorder, 2022