ISLAMABAD: Federal Minister for Finance and Revenue Miftah Ismail said that the government’s efforts to reduce imports have finally borne fruit and the country’s import bill has decreased by $2.7 billion as the country imported goods worth $ 5 billion only in July as compared to $7.7 billion in the previous month (June).
Addressing a news conference on Sunday, the minister said that his government is determined to minimise the large current account deficit left by the PTI government. He said that the incumbent government has helped the country avert soverign default at the cost of its political capital.
Ismail said in each of Imran Khan’s four years of government the country’s budget deficit remained the highest in history. He said that when Imran Khan came to power the value of rupee against the US dollar was 122 but when he left it was 190.
The minister said that the Pakistani rupee, which has taken a beating against the US dollar in recent weeks, should see some improvement in “two weeks”.
“I really think — although I never like to speculate on the currency market — but I really think that the rupee’s true value is far greater (than what it is right now),” the finance minister said.
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He explained that in the past two months, Pakistan had to part with “a billion and another billion”, which put pressure on the local currency.
He said that the coalition government had saved the country from default. “We plan to give Pakistan a healthy economy. We are determined to minimise the current account deficit and turn it into surplus within a year or so.”
He said that efforts will be geared towards more dollars coming in daily and fewer leaving the country next month. “With our efforts to reduce imports and InshaAllah, with the daily rise in incoming dollars versus a decline in outgoing units, there will be a surplus (of dollars),” he said.
“This will lead to a reduced pressure (on the rupee) and the dollar’s value against the rupee should then see a slight drop,” the minister added. He said that he has hope that the “next two weeks will InshaAllah be better”.
He cautioned, though, that although this is his view since he believes “the fundamentals are in Pakistan’s favour”, but “speculation and sentiments also play a role in this”.
In criticism of the past rulers, he said that the PTI-led government increased the country’s debt by Rs20,000 billion in the last three and a half years.
He said that the government was working on a plan to increase exports over the next two to three months. “But the big issue of impending default has been resolved,” he reiterated.
The finance minister said that the coalition government did not bring the country to the brink of default in three months.
“In four years, the PTI could not reach the tax-GDP ratio of the PML-N government. We had left it at 11.1pc and the PTI took it to 9pc. Imran Khan used to say he would increase tax (collection) but he reduced it every year.”
He claimed that the PTI government violated the agreement made with the International Monetary Fund (IMF) by selling oil and petrol at a loss.
Copyright Business Recorder, 2022