The federal government has decided not to enter an International Monetary Fund (IMF) programme for now, Finance Minister Asad Umar said on Saturday.
The finance minister made the remarks while talking to businessmen at the Karachi Chamber of Commence and Industry (KCCI).
Umar said that instead of rushing into the IMF programme, the government was exploring alternative options.
Furthermore, the finance minister announced that the government will unveil a mini-budget on Jan 23 instead of Jan 21. He associated the two-day delay to an impending foreign trip of Prime Minister Imran Khan.
The finance minister said that his visits of Lahore and Karachi were regarding a one-point agenda: the amended finance bill, which he said will facilitate businessmen.
Umar indicated that the amended bill will also carry “some good news” for the Pakistan Stock Exchange (PSX) .
The minister said that he consulted all stakeholders over the upcoming mini-budget, assuring the assortment of businessmen that tax anomalies will be eliminated in the budget.
The minister rejected the impression that the government was only borrowing money, stressing that several agreements have also been signed to bring investment into the country.
“The impacts of the investment agreements will start surfacing from the next week,” he added.
Asad Umar, even before he was sworn in, had said that the economy would need an infusion of more than $12 billion within six weeks.
In a later interview with Bloomberg, he had said that the nation’s financial gap was somewhere between $10bn to $12bn, adding that the new government would need a bit extra so it doesn’t “live on the edge”.
In October last year, Saudi Arabia had announced a $6 billion bailout package for Pakistan’s ailing economy. The package includes $3bn in balance of payments support and just as much in deferred payments on oil imports.
The UAE had also announced a package exactly the same size and terms and conditions as given by Saudi Arabia. The all-weather friend, China too, had pledged to lend $2 billion to Pakistan to shore up dwindling foreign exchange reserves.
Moreover, Islamabad and Riyadh are expected to ink memorandum of understanding (MoUs) to bring in Saudi investment in excess of $10bn this month. Pakistan is also eyeing similar MoUs with China, the United Arab Emirates and Malaysia over the next two months.
The federal cabinet has also approved a strategy to issue so-called ‘Panda bonds’ in the Chinese market to raise foreign exchange from global markets.
Meanwhile, Pakistan Peoples Party (PPP) in a statement strongly opposed the government’s upcoming mini-budget.
The party’s vice president, Senator Sherry Rehman, expressed grave reservations against rising inflation and the government’s announcement of the mini budget.
“Will this inquilab sarkar (revolutionary government) announce a new mini budget every four months?” she asked.
She said that the government should make preparations for an annual budget and that this was not the time to announce a mini budget.
The PPP leader likened the decision to a “budget bomb” being dropped on the people, based on supposed conditions put forth by the IMF.
“Every month new taxes are being imposed and some commodity or the other sees a hike in prices.
“One day the prices of medicines go up and the next, a mini budget is announced,” Rehman said adding that the government is “robbing the people of the right to live”.
She said that the “tsunami of change” had now transformed into a “storm of inflation”.
Rehman recalled that inflation stood at 5.8 per cent in July, whereas now it had gone up to 6.2pc.
She said that those who claimed being “friends of businessmen” are in fact their enemies and declared that the government is incapable of running the economy.
The PPP leader further criticising the government’s performance said that in the past five months, they had “done nothing but raise slogans for economy and accountability”.