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Wednesday, July 17, 2024

KSA extended $3b deposit after COAS Bajwa’s call: Miftah Ismail

The Minister said he is guaranteeing two things: the IMF programme will be restored, and Pakistan will not be going bankrupt.

Finance Minister Miftah Ismail said it is a coincidence that Saudi Arabia announced to extend a $3 billion deposit to Pakistan after COAS General Qamar Javed Bajwa called Saudi Prince Mohammad bin Salman.

In an interview with Geo News, Ismail said the Kingdom had made him other offers he will talk about next month, adding that it would be a good package overall.

The Minister said, “I’m giving you a guarantee on two things: the IMF programme will be restored, and Pakistan will not be going bankrupt.”

Read more: World Bank issues warning of global recession

Dismissing fears that Pakistan will go down the road to an economic crisis like Sri Lanka, he said the government is undergoing talks with the UAE and will announce good news regarding China soon.

On Thursday, the government increased the prices of petroleum products by Rs 30 per litre to reduce fuel subsidies to restore the International Monetary Fund (IMF) programme.

Dawn News reported an official as saying that this was the first step toward convincing the IMF to release the next tranche at the earliest.

In response to whether the prices will be further increased in the future, Miftah noted that the government is still paying about Rs56.71 per litre subsidy on HSD, which is not affordable.

The Minister said the step would help Pakistan achieve a staff-level agreement with the IMF.
He said Prime Minister Shehbaz Sharif would soon unveil a package to protect the poor from the petroleum price hike that was unavoidable because of the agreements signed by the previous government.

Ismail said the decision of such a price hike was not an easy one for any finance minister or a prime minister and criticised the PTI government for freezing prices for months.
“Imran Khan had promised IMF that Rs30 levy and 17% sales tax would be charged on petroleum products,” he said.

Read more: PDM govt succumbs to IMF as it hikes petrol rate

Ismail said the government took a considered decision to increase prices and would stand by it because the choice was between the political interest of the party and that of the state.

“This will cost us political capital but interest of the state was supreme and the government is ready to sacrifice political costs; we cannot let the country to drift towards default,” he said.

The Minister said we would increase reserves by 50 per cent before the election next year.