Finance Minister Shaukat Tarin vowed to end the reliance of Pakistani economy on International Monetary Fund (IMF) and break the “begging bowl” in an interview with Bloomberg on Thursday.
While talking to Bloomberg, Tarin said that if Pakistan wants to earn international respect, it has to break the begging bowl. He said he favors bilateral loans and borrowings that do not force the government to cut its spending and increase prices. He said that previous governments accepted the IMF terms for a short term, but once the program ended, they would have the same extravagant expenses again, but this time the budget will control our expenses.
Shaukat Tarin has just negotiated the final tranche from IMF worth $1 billion. He said that his target is budget deficit of 5% to 5.25% of the gross domestic product in the fiscal year beginning July 1, down from the current 6.1%, and for a boost in economic growth to 6% from 5%, international business news agency Bloomberg reported.
Tarin was optimist that if the country starts generating 5% to 6% balanced growth, it will have a sustainable growth and we will not need another IMF program. “I think this program should be enough”, he said. “We are trying to now take those steps which are going to put this economy on an inclusive and sustainable growth path,” Tarin explained. “Once it gathers momentum and is sustainable, then I think we will probably see 20-30 years of growth,” he said.
He said that the first step to improve Pakistan’s halting economy is to improve exports. This year, textile exports are expected to increase by 40% to a record $21 billion and to $26 billion next year. Also the manufacturers are being given loans by the central bank on low interest to boost manufacturing industries.
The Executive Board of IMF has approved $1billion loan for Pakistan under the Extended Fund Facility (EFF) which has been confirmed by Finance minister Shaukat Tarin himself. “I am pleased to announce that IMF Board has approved 6th tranche of their program for Pakistan,” he tweeted.
A session of the International Monetary Fund (IMF) Executive Board for the 6th review of Pakistan’s economy was held in Washington. In order to meet conditions of the IMF, the government had successfully managed to get the State Bank (Amendment) Bill, 2021 cleared from the Upper House of Parliament – which was the last stumbling block in reviving the stalled program.
He said the approval of the sixth tranche of loan by IMF for Pakistan indicates that the international lender agrees to Pakistan’s economic strategy. The next review (seventh) under the $6 billion EFF program will be due in April 2022. The last and final eighth review is expected to be done in September 2022.
Regarding Prime Minister Imran Khan’s visit to China, the finance minister said, “We will ask China to relocate its industries to Pakistan. He said our Special Economic Zones are ready and we want China to establish industries there so that both countries can benefit.”
