Former finance minister Shaukat Tarin said on Wednesday the PTI had “no economic plan” when it came to power in 2018.
“Economic planning took time and that caused retardation,” said the former finance minister while addressing a press conference at the Sindh Governor House.
Another failure of the PTI government was its inability to fix the state-owned enterprises (SOEs) — an area in which the PTI government achieved “nothing,” said Tarin.
He also accepted blame for failing to develop a “trading floor” that the government could use to hedge against the upswing in the global prices of commodities.
The former finance minister spent the better part of his press conference to rebut the points that PML-N leader Miftah Ismail raised in a presser a day earlier.
As for his claim that the current account deficit might touch $20 billion in 2021-22, Tarin said the annual gap should stay below $15 billion or four percent of the GDP.
Of the $12 billion current account deficit recorded in the first eight months of 2021-22, as much as $11.5 billion originated from the increase in the prices of just four items — petroleum products ($6.5bn), coal ($1bn), palm oil ($1bn) and vaccine ($3bn), he said.
“This means we basically left the current account in surplus,” he insisted.
Similarly, he refuted the claim of Miftah Ismail that the fiscal deficit in 2021-22 is going to touch an all-time high of 10 percent as a percentage of GDP.
“The fiscal deficit is 3.9 percent for nine months. It’ll be 6.4 percent (for the whole year) and amount to Rs5.1 trillion,” he said.
Responding to the PML-N leader’s claim that the last relief package announced by former premier Imran Khan would enlarge the fiscal deficit, Tarin said the Rs466 billion programme will have “no impact” on the next budget.
The relief package will use the funds from a cut in the Public Sector Development Programme (Rs100 billion), reduction in the share of provinces (Rs140 billion), dividends from state-owned companies (Rs120 billion) and additional revenue collection by the Federal Board of Revenue.
About the rapid decline of $5 billion in foreign exchange reserves in recent weeks, the former finance minister said the Chinese debt of $2.3 billion matured and is sure to be rolled over after a “clean-up period” of two to three weeks.
The settlement of Reko Diq dispute cost reserves another $900 million, which will flow back once state-owned energy firms raise dollars for their participation in the mining project.
“If you include these two factors, the reserves’ actual position is $14.5 billion. We’ve yet to get $1 billion from the International Monetary Fund. We were also going to the (global) capital markets to raise $2.5 billion, but decided to wait as interest rates are spiking,” he said.