Former President of the Islamabad Chamber of Commerce and Industry (ICCI), Dr Shahid Rasheed Butt, said on Wednesday that despite its strict attitude, the IMF could not convince Pakistan to follow fiscal discipline. “The country is barely avoiding bankruptcy while the inflation is uncontrollable, yet the spending spree continues,” he said. Shahid Rasheed Butt said that the displeasure of the IMF is increasing due to continued violations of basic economic principles, open violations of agreements with the lender, and irresponsible fiscal actions.
In a statement issued today, he said that the current budget is not by the country’s economic conditions and ground realities, and it can be kept alive only with the help of loans worth billions of dollars.
He said one or more mini-budgets would have to be introduced in the current year to control rapid economic decline. In the current situation, quick restoration of the IMF programme is difficult, without which new and rescheduling old loans will be very difficult.
The business leader said that in the present scenario, the government would have to rely on local banks for disbursements, an expensive option that will lead to reduced productivity, increased inflation, and mistrust of the business community.
“The IMF has serious reservations about fiscal irresponsibility and mismanagement, which will contribute to increasing deficits and inflation,” he warned.
The IMF is also uneasy over the lack of interest by the authorities in getting the country out of the current mess, he said.
The GDP growth rate has decreased to only 0.29 percent from last year’s 6.1 percent. The performance of all three sectors of the economy—agriculture, industry, and the service sector was disappointing compared to the previous year, and none of the sectors could achieve their targets. He said the per capita income has also decreased by eleven percent, and people have been waiting for good news since last year.
Many experts believe the signs of default have appeared, barring an official announcement.