ZAHEER ABBASI

ISLAMABAD: Finance Minister Ishaq Dar said on Monday that there is nothing to worry about the foreign exchange reserves and ruled out the possibility of seeking a new loan from the International Monetary Fund (IMF) to support the balance of payment (BoP).

The finance minister, who appeared for the first time at a media briefing after the Supreme Court verdict in the Panama Papers’ case in which it asked National Accountability Bureau to file a reference against him for having assets beyond known sources of income, also stated, “There is no plan of the government to go to the IMF.” About his resignation, he said that it is the prerogative of the party and decision of his party will be acceptable to him.

The finance minister added there is no issue in terms of foreign exchange reserves and State Bank of Pakistan (SBP) holds fairly satisfactory reserves.

“We have been handling it without payment of Coalition Support Fund (CSF) to Pakistan by the United States and will handle it,” he said and claimed that total foreign exchange reserves are over $18 billion.

He, however, acknowledged an increase in the current account deficit and was optimistic that as Prime Minister’s incentive package of Rs 180 billion for exporters is showing positive results and there has been a slight increase in remittances, deficit is expected to reduce.

The finance minister said that Prime Minister Shahid Khaqan Abbasi has up-scaled export package to increase growth of exports. He said that imports have been increasing because of capital goods and machinery import, which would be beneficial for the country in the long-term.

He said the government is taking steps to increase exports and control imports while remittances have increased to $4.79 billion in the first quarter of the current fiscal year against $4.74 billion for the same period a year before. The government has been able to control expenditure in the first quarter, he claimed.

Dar said that total debt as percentage of GDP stands at 61.6 percent because of an increase in development spending for energy projects as well as security expenditure.

He said that Pakistan is not higher in terms of debt as percentage of the GDP because debt to GDP ratio in India is 68 percent, Japan, 120 percent; the UK, 80 percent;, and the US, 83 percent. Dar said that rating agencies have improved Pakistan’s rating and GDP projections were revised upward by the World Bank, Asian Development Bank and the IMF.

The finance minister said that in the net domestic debt, the ratio of external debt was 21.4 percent in 2014 while it has been decreased to 20.6 percent now. The reason is that over 10,000 electricity projects are being installed in the country to overcome load-shedding which is expected to be eliminated by November or December 2017.

The finance minister said that the present government of Pakistan Muslim League (Nawaz) has been able to increase tax to GDP ratio from 9 percent in 2013 to 12.3 percent during the last four years, tax collection from Rs 1,946 billion to Rs 3,162 billion, and country foreign exchange reserves to over $21 billion. The minister also stated that the World Bank statistics about Pakistan’s external needs of $31 billion are inaccurate and the matter was taken up with the Bank for making a necessary correction. He said that Pakistan’s gross external financing needs are $18 billion.

The finance minister said that circular debt was Rs 390 billion with two hours load-shedding a day against a circular debt of Rs 503 billion in 2013 even when the country was facing over 18 hours load-shedding a day. “This is not an alarming situation,” he added.

The finance minister said that terrorist sanctuaries do not exist in Pakistan as armed forces have strongly acted against them in the tribal areas, although the CSF has dried up and the country received $500 million during the last fiscal year against $1.2 billion.