PM hints at interest rate cut

Prime Minister Imran Khan has hinted at the possibility of a cut in policy rate for industrial growth and stated that the government would not increase electricity tariff further.

On Friday, premier had an interaction with media persons at the Prime Minister's Office and stated this in response to a question asked by Business Recorder in the corridor, that how his government would achieve industrial growth when the policy rate and input cost are so high.

The prime minister also dwelt in detail on the economic situation inherited by his government and measures taken to avert a looming default owing to the country's inability to repay the debt borrowed by the last two governments of Pakistan People's Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N).

The prime minister described the situation of power sector as a serious challenge for the country, and said that the present government had decided to hold a meeting with all the stakeholders as electricity prices can not be increased further.

The prime minister stated that the situation of the energy sector was a national problem and government would try to find out a solution to the problem. He said that when the government came to power, power sector circular debt stood at Rs 1,250 billion, the PML-N government added Rs 450 billion to it in the last fiscal year by not increasing prices due to election expediency.

"We have reduced the monthly circular debt from Rs26 billion to Rs12 billion and line losses have been reduced by Rs100 billion," he said, adding that there was a huge gap between cost of production of electricity - owing to faulty agreement signed by the previous government- and the government has been selling it at a lower price.

The prime minister said that energy contracts were signed by the previous governments with higher rate of return in dollar on investment and the present government singed only one wind power contract at five cent. He said that former prime minister as petroleum minister signed a 15-year LNG contract but the LNG price has declined to half from the contract price. The prime minister said that gas circular debt was Rs154 billion when the present government came to power.

The premier stated that what kind of the economy was inherited by the government and why the people were facing tough situation was due to the fact that there is a history behind it, and stated that the country was facing historical high current account deficit of $19.5 billion.

He added that the country's ability to earn foreign exchange reserves through export was eroded during the previous government with exports contracting from $25 billion to $20 billion while country's external debt was increased to $100 billion during the last 10 years from $41 billion.

The prime minister added that there were only two weeks of foreign exchange reserves left when the current government assumed office.

This, he stated, necessitated seeking help from friendly countries - Saudi Arabia, China and the UAE.

The PM said that the country was required to repay $10 billion loan in the first year and help of friendly countries saved Pakistan from default.

He said that if Pakistan had defaulted, dollar's value would have gone beyond Rs 200 to Rs 225 and inflation and price hike would have been greater than what it was now.

He added that the government reduced current account deficit by 75 percent, successfully dealt with difficult economic situation with the cooperation of friendly countries.

On the external front, Imran stated that the country's respect is much more than the past and there is a positive image of the country due to the government's successful policies.

He said that the government is investigating the recent flour and sugar crises and vowed that his government would take on the cartels which are sitting everywhere to mint profit.

The prime minister said that he received investigation report on flour crisis but there were some gap in it, so he sought a report that would be shared with the people.

He also promised to develop a system that would ensure that such crises are not repeated in the future.

Imran also criticised the Competition Commission and stated that head of the commission is sitting on the regulatory body through taking a stay order from the court. He said corruption has to be eliminated for real growth in the country as this is a major hindrance in development and growth.

The prime minister stated that his government would introduce an electoral law in the parliament to introduce biometric voting in the country to deal with the rigging allegations.

The prime minister stated that his government would also introduce an amendment in the senate to vote on anything through show of hands instead of secret voting.

He said that Jamiat Ulema-e-Islam chief must be tried under Article 6 after his statement that "he acted on someone's instructions to overthrow the government".

The prime minister also complained that media had been publishing fake news against him and his ministers.

He further stated he was not involved in corruption like his predecessors and that is why he enjoys full support of the army, adding that the previous government had conspired against the army because the ISI and the MI were aware of their corruption.