'Discussions with IMF in positive direction'

Minister of State for Revenue Muhammad Hammad Azhar has said that discussions with the International Monetary Fund (IMF) are going in a positive direction and there has been some improvement with reference to initial conditionalities. Addressing a press conference here at Public Information Department on Thursday, the minister of state for revenue said that the negotiations with the IMF are continuing. "We are in constant contact with the IMF. Some improvement has been made. We will not accept any conditionality attached with the IMF package that will directly impact our economy or people," he added.
"The discussions with the IMF are in positive direction and the government will sign the agreement with the Fund when we would think it appropriate," Hammad Azhar added. When asked about specific timing of signing of the agreement with the IMF, he said that it depends on improvements in the conditionalities.
However, he said that his government has procured some breathing space through bilateral support from Saudi Arabia and the United Arab Emirates and talks with China are near conclusion. "You will hear very good news from China soon," the minister said. He further said, "No new taxes will be imposed in the current fiscal year to achieve the revenue target as prior conditions for availing the bailout package from the IMF," he said.
To a question, the minister also ruled out possibility of taxation measures of 0.5 percent of Gross Domestic Product (GDP) as a major hurdle in the agreement with the IMF and stated that efforts would be made to achieve the set target of Rs 4,398 billion in the current fiscal year. Responding to the criticism raised by the PML-N over the performance of economic indicators and downgrading by rating agencies, he said the credit rating agencies downgraded rating from B to B negative on the basis of pre-September economic data as the PML-N left the country in the worst situation. He added that reports are available on the downgrading of Pakistan's ratings during PML-N's times.
The minister said that the CPI based inflation had gone up by 5 percent in first six months rule of PML (N) but it increased only by 1.4 percent in first six months of the PTI government. Current account deficit had widened from $2.5 billion per annum to $19 billion in last five-year tenure of the PML-N and the budget deficit also witnessed the highest ever absolute figure in any financial year of the country's history.
He said Pakistan received foreign direct investment worth $1.72 billion in the August-December 2018. He said this figure was $426 million in the first six months of the PML-N government. "This is more than double of the figure reported in the first five months of the previous government," he remarked. About the circular debt, he said that circular debt doubled during the tenure of the PML-N. The PML-N government first cleared circular debt without conducting pre-audits, which is a 'separate scandal'. The circular debt had crossed Rs 1,000 billion when PML-N left the government.
The total losses of the public sector enterprises were Rs 190 billion when the PML-N government came into power. The figures had reached Rs 453 billion in the fiscal year 2016-17, he said. He said Pakistan has never experienced such a huge current account and trade deficits. "There is near unanimity, even in international institutions, that Pakistan has never experienced deficits larger than this. However, we took corrective measures to improve the economic situation," he said.
He said, "Trade deficit is falling and we expect a sharp reduction in it in coming months." The minister, however, regretted whenever there is good news on the economic front - when the stock exchange goes up by 5,000 points or when traders are happy with the economic reforms package or when there is a visible decline in the current account deficit or a decline in imports - a few loyalists from the opposition appear on TV to 'mislead' people.
He further said when the PML-N lawmakers see the economy moving towards stability, it troubles them and they appear before media to create panic. "We will expose their fake claims," he said. He said when his party came into power, Pakistan's imports were growing at a rate of 15 per cent, whereas now imports have witnessed negative growth, meaning that in absolute terms, and even percentage wise, a decline can be seen. "When we receive January's data, we will have a handsome growth figure when it comes to exports," Azhar added.