The release of an IMF tranche seems to have bolstered the confidence of Federal Minister for Finance and Revenue Shaukat Tarin who has described the approval of the $1 billion 6th tranche by the IMF as its endorsement of the policies adopted by the incumbent government. According to him, the release of tranche is not only of political significance but will have a long-lasting impact on the economic development and prosperity of the country. His optimism, unfortunately, appears to be misplaced for a variety of reasons. In my view, the IMF tranche appears to be of little consequence because of widening current account deficit and rising inflation. Inflation cannot be tamed without damaging economic growth. No doubt, the government is in a situation where it has to choose between two equally unpleasant courses of action.

Hameeda Khan (Islamabad)

Copyright Business Recorder, 2022