Government denies claims of economic emergency

ISLAMABAD:

The government said on Tuesday that it was not considering declaring an economic emergency to address one of the greatest crises in the nation’s history, but it did say that it was thinking about energy-saving measures to cut down on the cost of imports.

The International Monetary Fund (IMF) program is still a priority for the administration, according to a statement from the finance ministry, and negotiations to begin the program’s review have proceeded.

“In recent days, a misleading message about alleged measures for an economic emergency has been making the rounds on social media. The Finance Division vehemently disputes the claims stated in the aforementioned communication and explicitly asserts that no plans exist to impose an economic emergency, according to the statement.

It’s interesting to note that out of the nine suggestions made in the social media post, at least two were already being implemented in relation to import restrictions, while the State Bank of Pakistan advised that one concerning energy saving was actively being considered (SBP).

The ministry noted that the creation and dissemination of such false messages were against national interest during these difficult economic times. “Unfortunately, the message is aimed at creating uncertainty about the economic situation in the country and can only be spread by those who do not want to see Pakistan prosper,” the ministry said.

For the current fiscal year, Pakistan needs at least $32 to $34 billion to pay off its debt and close the current account deficit. The first four months’ foreign inflows remained at $4.2 billion.

According to the ministry, “exogenous variables including the commodities super-cycle, the Russia-Ukraine war, the global recession, trade headwinds, Fed’s hike in policy rates, and destruction caused by catastrophic floods” are mostly to blame for the current challenging economic scenario.

The statement added, “Even in the face of the economic repercussions of record floods and needing to satisfy IMF conditionalities, the administration has been making every effort to mitigate the impact of such external causes.”