A spokesman for the Ministry of Finance on Saturday said Pakistan’s economy was moving firmly in the right direction to achieve stability and sustainable growth under a rigorous reforms policy.
“… the country is surviving economically and will continue to survive . . . what Pakistan has done is decisive and courageous: we will continue to walk the road to reforms to stabilize our economy and in the course of time to steer it toward the path of sustainable growth,” he said.
Refuting the negative remarks uttered by an economist Atif Mian about Pakistan’s economic policy and its comparison with Ghana and Sri Lanka, the spokesman termed it a “misplaced criticism made from a purely theoretical point of view.”
Responding to a tweet of the economist in which he criticized Pakistan’s economic policy and suggested Pakistan take decisive actions, aggressively restructure and take courageous actions; the spokesman said “This is a veiled suggestion to declare default.”
He said “The gentleman has no idea how practical economics operates in practice. His comparison with Ghana and Sri Lanka, is also misplaced given the incomparably small size of their economies and populations relative to Pakistan.”
Fundamentally, the spokesman said the economist did not care to analyze the structure of Pakistan’s debt which had less than a 10% share in commercial bonds/sukuks, with the next maturity falling due in April 2024.
“The rest of the debt is owed to the multilateral and bilateral creditors. Both these classes of creditors are engaged with Pakistan and none has assessed that Pakistan should default. “
The spokesman regretted that the author had completely ignored the deep-rooted reforms Pakistan had undertaken during the last nine months, including market exchange rate, and interest rate adjustments. mid-year taxation to improve fiscal position, imposition of levy on petroleum products and non-monetization of fiscal deficit.
“All these actions were undertaken under an IMF programme which was unprecedented as never in the country’s history such front-loaded conditionality was imposed. However, we accomplished it through heroic efforts.”
He said “It is unfortunate that despite such actions, the staff level agreement (SLA) has still not been reached delaying the release of the 90 review tranche. The country is surviving economically and will continue to survive.”
The spokesman said what Pakistan had done was “decisive and courageous: we would continue to walk the road to reforms to stabilize our economy and in the course of time to steer it toward the path of sustainable growth.”
He said the comparison of the nominal exchange rate was also unwarranted, adding “Pakistan’s real exchange rate is currently estimated to be 15% undervalued.—APP