Former finance minister Shaukat Tarin on Wednesday said the current coalition government of Pakistan Muslim League-Nawaz (PML-N) "may try to liquidate unbudgeted circular debt to spike the deficit to Rs5,600 billion in its bid to discredit Pakistan Tehreek-e-Insaf (PTI)".

"On the fiscal front, 9-month deficit is Rs 2.5 trillion or 3.9% of GDP. We were on track to contain deficit to 6.4% of GDP full year," Tarin tweeted.

"However, the present govt may try to liquidate unbudgeted circular debt like 2013 to increase deficit to Rs5,600 billion to discredit PTI."

His tweets come as both PML-N and PTI leaders traded barbs on the current state of the economy. The PTI government has just recently made way for the PML-N after a no-confidence vote ousted Imran Khan as prime minister.

With the tenure coming to an end, PML-N leader Shehbaz Sharif took charge as premier, and was quickly tasked with a revival of the economy many believe is growing, but at a heavy cost. Pakistan is also currently in talks with the International Monetary Fund (IMF), hoping that its programme is revived that would pave way for a billion-dollar tranche.

Meanwhile, talking about the latest projections by the World Bank and International Monetary Fund (IMF), Tarin said that accounting for the impact of international commodity prices, the latter increased the current account deficit (CAD) projections for all South Asian nations.

“They have projected 5.3% deficit for Pakistan," he said.

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"With a monthly current account deficit now within $1 billion, we expect it to stay within 4.5% or $16 billion. The above increase is due to $14 billion increase in commodity prices," added Tarin.

The IMF in its latest report, “World Economic Outlook (WEO), War sets back the global recovery” has projected Pakistan's GDP growth rate at 4% in 2022 against 5.6% in 2021 and projected it at 4.2% for 2023.

The Fund has also projected an increase in inflation from 8.9% in 2021 to 11.2% in 2022, which is projected to decline to 10.5% in 2023.

Commenting on GDP projections, Tarin said “with robust growth in revenues, agriculture, Large Scale Manufacturing (LSM), exports and electricity usage, we expect it to close at 5%”.

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