Accord with IMF this week: Tarin

ISLAMABAD: Federal Minister for Finance Shaukat Tarin on Sunday claimed that Pakistan and the IMF staff-level agreement would be done this week as the Fund had sought details of the agreement between the Centre and provinces for financing PM’s Relief Package through which diesel, petrol and electricity prices were frozen at the existing level till June 2022. Shaukat Tarin was addressing a news conference here at the Pak-China Center on Sunday noon.

"First, they agreed that the financing for such relief package is available through the provinces and SMEs and secondly now they are verifying whether these agreements exist or not. My final meeting with the IMF staff is expected on Tuesday (tomorrow) and then the memorandum of economic and financial policies (MEFP) will be finalized,” he added.

The minister said that the electricity prices were reduced by Rs5 per unit and this relief had already been provided to consumers. He cited an example that if electricity bill stood at Rs1,840 last month, it got relief of Rs805 and the consumers would have to pay only Rs1,035 this month. When a reporter asked where was the notification for provision of Rs5 per unit relief in electricity bill, he said that it was made a part of the bill. The reporter again added that if was done without notification, it might cause an irregularity but the minister did not reply.

To another query regarding import of wheat in the next fiscal year, he said that the wheat production target was expected to exceed by 5 to 6 percent and there should be no need for importing wheat. However, he said that if the government wanted to build a strategic reserve of two million tons wheat, then the government would have to import 0.5 to 0.7 million tons of wheat. He was also sure that there was no possibility of diesel shortages as the country possessed storage of 34 days.

Declaring himself not a turncoat (Lota), Tarin said that he would never join any other government if the incumbent PTI regime did not remain in power. "I am an elected PTI senator. If the PTI government remains in power, I would remain a minister. If PTI does not remain in power, I will never join any other government. I am a principled man and not a Lota."

When asked about the cost of uncertainty on the economic front and whether he would join any other government if the no-confidence motion succeeded against Imran Khan, he replied that the uncertainty did not turn into macroeconomic numbers so far but there should be a fallback plan. This uncertainty should not remain long and things should be settled in accordance with the constitutional requirements.

When asked about former finance minister Miftah Ismail’s stance that the government could not launch the Eurobond, Shaukat Tarin responded that in the aftermath of the Ukraine crisis, the bond’s yield had increased in international market. It is not an appropriate time to go for launching the Eurobond next month because it will offer higher rates, he added. He was of the view that the country’s reserves stood at $16.6 billion held by the SBP and Miftah Ismail should tell that there were foreign currency reserves of just one month import when they left the government in 2017-18. "They are seeing dreams but their night will be long," he stated while referring to political opponents of PMLN.

Referring to the UN’s Happiness Index, the minister said that Pakistan stood at the ranking of 67th position in 2022 out of 150 countries and its ranking improved by seven notches since 2018. India and Bangladesh's ranking deteriorated in this index, he added. Pakistan’s ranking in South Asia is on the highest while in Asia, Islamabad’s ranking stood at 11th position.

He said that the country’s current account deficit (CAD) had nosedived to $545 million in February 2022 against $2.531 billion in January 2022. The government and the SBP took steps and the CAD fell sharply despite some economists' assertions that it might climb to $20 to $22 billion till the end of the ongoing financial year. He said that exports and remittances performed well while imports reduced massively. The minister conceded that there were some headwinds but the GDP growth was still expected to touch 5 percent mark for the current fiscal year as Large Scale Manufacturing (LSM) growth had achieved 8.2 percent in January 2022. “Despite headwinds, the economy is picking up and GDP growth will touch 5 percent mark,” he maintained. The minister also highlighted the declining Sensitive Price Index (SPI) for showing that the inflation was coming down and dropped by 1.37 percent whereby the SPI stood at 15.21 percent, which was 36 months low SPI on weekly basis. He reminded that the SPI stood at 21 percent last month, indicating that it dropped by 6 percent.