No risk of default: Govt says ninth IMF review on track

The federal government on Tuesday strongly refuted reports that an economic emergency is about to be imposed in the country to stave off default, noting that talks for the ninth review by the International Monetary Fund (IMF) are on track.

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In a formal rebuttal by the Federal Finance Division on Tuesday evening, the division said that a false message on supposed economic emergency proposals has been circulating on social media.

“Finance Division not only strongly rebuts the assertions made in the said message but also categorically denies it and that there is no planning to impose economic emergency.”

The division said that the message was creating uncertainty about the country’s economic situation. It went further and said that such rumors were being spread by people who did not want to see Pakistan prosper.

“Creation and spread of such false messages is against national interest in these times of economic hardship,” it deemed.

Referring to the ‘nine-point’ proposal contained in message being circulated, the division said that they indicate how far-fetched they are.

The division said that comparing Pakistan with Sri Lanka was quite inappropriate, given the inherent strength and diversity of Pakistan’s economy.

“The present difficult economic situation is mainly the result of exogenous factors such as commodity super-cycle, Russia-Ukraine war, global recession, trade headwinds, US Fed’s increase in policy rates and devastation wreaked by unprecedented floods, the government explained.

It went on to point out how the government had been making efforts to minimize the impact of such external factors, all the while dealing with flood damages and strict IMF conditionalities.

“The government remains committed to completing the IMF program while meeting all external debt repayments on time,” the statement added while pointing to austerity measures adopted to eliminate non-essential expenditures.

With several ministers already identifying the crushing load of the country’s massive energy bill on its meagre resources, the letter said that the government has been deliberating energy conservation to reduce the import bill.

“Such deliberations will continue in the cabinet, and all decisions will be taken in consultation will all stakeholders and in the best national interest,” the statement added.

On the IMF review, it said that the program remains on track and that “negotiations leading to ninth review are now at an advanced stage.”

“Government’s recent efforts have resulted, amongst others, in lower current account deficits in recent months and achievement of FBR revenue targets,” it said, trumpeting the government’s successes.

“Easing up of pressure on the external account is also foreseen in the near future,” it said, adding that there remains the need to make structural adjustments in the mid-term.

“The economic situation of the country is now moving towards stability,” the division maintained.

“Finance Division urges the people of Pakistan to contribute towards economic betterment and stability and not to pay heed to malicious rumors mongering which is against the national interest of Pakistan.”

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