ISLAMABAD: Federal Finance Minister Ishaq Dar has refuted the reports that the government had built its foreign exchange reserves by borrowing from the International Monetary Fund.
Addressing a press conference along with Special Assistant to Prime Minister Haroon Akhtar and FBR Chairman Nisar Khan, the minister said that the government received $5.27 billion from the IMF and returned $4.42 billion to it. He also rejected the speculations that the government was borrowing at a higher rate. “We had borrowed external loans at interest rate of only 3.3 percent,” he claimed.
About the public debt, Dar said that it had increased by Rs 3,800 billion during the tenure of the incumbent government by reaching Rs 18,264 billion in November last from Rs 14,400 billion. Similarly, the foreign debt rose by $ 3.2 billion to $ 51.31 billion from $ 48.13 billion, he added.
On a question that the government had shelved plans to private its power supply companies, Dar said the government could opt for any plan to make them profitable. “We can have the option of strategic partnership for power supply companies,” he remarked.
He further said the country’s GDP growth could be affected due to the less production of cotton bales this year. “We are trying to take growth to over 5 percent during the ongoing financial year,” he added.
Talking about the National Finance Commission award, he said the Ministry of Finance had moved a summary to the President for reconstituting the commission as the federal government had received the name of a technical member from the Punjab.
He revealed Saudi Arabia was also interested in making China-Pakistan Economic Corridor-like investment in Pakistan. A technical delegation of Saudi Arabia would visit Pakistan to explore investment opportunities in the country in next three weeks, he added.
Dar further said the government would have to make legislation to restrict debt to GDP below 50 percent in next few years. The government is continuously breaching the Fiscal Debt Limitation Act as debt to GDP ratio is over 60 percent. Dar said he had rejected the IMF’s demand to increase the gas and electricity prices. He further said Pakistan had met five performance criteria of the IMF.
Highlighting the economic performance of the country, Dar said the country’s foreign exchange reserves had surged to $ 20.27 billion which were enough for four-month imports. He said the government had brought down the budget deficit to 5.37 percent of the GDP during 2014-2015 from 8.8 percent of the GDP. The government would further reduce it to 4.3 percent of the GDP during the ongoing fiscal year.
Dar said tax collection during the second quarter of the current financial year exceeded the target by Rs 35 billion. He said tax collection during the first six months of the year was 1,385 billion against the target of Rs 1,390 billion.
