Former finance minister Miftah Ismail urged the government to take action to stop the coming crisis because he believes Pakistan’s current situation could lead to default.
Miftah while talking to a local media channel on Tuesday said that “Although I firmly think that Pakistan should not default, the path we are currently travelling may do so as a result of the escalating economic difficulties. The threat of default should be avoided.”
The former minister claimed that unless the government completes the International Monetary Fund’s (IMF) ninth review, Pakistan will continue to face the possibility of default.
The possibility of default will remain high as long as the IMF is not back on the table, according to Miftah, who served as Pakistan’s finance minister for more than five months.
He rejected PTI Chairman Imran Khan’s explanation for early elections and claimed that the previous administration had taken the nation toward default.
“Khan is to blame for dragging Pakistan into default, he breached his promise to the IMF and he is to be blamed for trying to sabotage the IMF program when we tried to revive it under Prime Minister Shehbaz Sharif’s leadership.”
The State Bank of Pakistan (SBP) paid $1 billion for the Sukuk bond earlier this month, putting an end to Pakistan’s immediate default risk.
The foreign exchange reserves have subsequently reached a catastrophic level, having dropped 10.45% to a four-year low of $6,714.9 million on December 2.
In contrast to the 0.7% of GDP that was agreed upon with the IMF, the fiscal deficit reached 1% of GDP in the first quarter of the current fiscal year.
However, according to Finance Minister Ishaq Dar, Pakistan wouldn’t default since it was moving in the right direction.
