Miftah Ismail lambasts govt’s economic policies  

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Agitated over the current economic condition of the country, former finance minister Mian Miftah Ismail on Thursday took to Twitter and lambasted the economic policies of the incumbent government.

The former minister started off by shedding light on the current account deficit, saying, “In the first half of fiscal year, July to Dec 18, budget deficit was 2.8% of GDP. This is higher than any July to Dec period of PMLN’s 5 year. Where is the deficit reduction PTI talked about? Where is their much-hyped austerity. Why are current expenses out of control?”

He also highlighted the government’s failure on the revenue front. “In spite of a mini-budget in Sept, where taxes were increased by Rs180 billion and tax collection targets reduced, govt is still short by Rs173 billion. PM Khan had promised that he will double revenues. Yet they are behind speed PMLN had achieved,” he tweeted.

Speaking about the country’s debt, he said the PTI govt has 2.24 trillion of new debt up to Nov 2018, adding that in the last 71 years, all govts combined took total a debt of less than Rs25 trillion, whereas PTI, in only five months, has contracted Rs2240 billion. “At this speed in 5 years it will double Pak’s debt of 71 years,” he stated on the social media site.

“In spite of a record devaluation of 35%, exports from July to Nov were actually below their level last year and only in December the exports increased a bit, so that they are only up by 2% for the first half. Compare this to 13% growth in exports last year under PMLN,” he said, referring to the “dwindling” exports.

He also spoke about imports, stating that even after the huge devaluation, the country’s imports are high. He admitted that imports may have reduced from last year, but only by 2pc and that too due to the large decrease in the price of oil internationally. He said the decreased import of machinery is signalling low investment and recession.

On Pakistan’s Gross Domestic Product, he said, “Last year growth was 5.8% and expected 6.2% this year. All int’l institutions were optimistic about Pak’s prospects. Now growth forecast brought to 3%. This is a loss of Rs1,400 billion to the economy. Because of PTI’s mishandling, economy has been forced into a recession.”

With regard to employment, he stated, “What happened to 1 crore jobs? How can you have new jobs when growth is only 3%. Economists estimate that you need 8% growth to provide 20 lakh new jobs annually. At 3% you will increase unemployment by about 7 to 8 lakhs people per year.”

Regarding the government mega housing project, he said the real estate and construction sectors are at a standstill, while private sector housing sector has caused huge unemployment and no new projects are being constructed. Far from 5 million new houses, PTI has almost brought to a halt homes that were being built by private sector, he lamented.

His 11th tweet was on the printing of money. He said, “In the first five months to Nov PTI has borrowed more than Rs1,400 billion from the State Bank. Compare this to Rs288 billion in the same period last year. What’s borrowing from the State bank? It is printing new money. This will increase inflation rapidly.”

On devaluation of currency, he tweeted, “Why is inflation rising rapidly and is higher now than the last four years? Because of huge and repaid devaluation. Last year when there was political uncertainty and international environment, including FATF, had turned against us, our government devalued by 10%.”

He continued, “This was like taking two aspirins for your headache. When caretakers came they devalued by about 7% more. That’s like taking a third aspirin for a bad headache. But since then PTI has overdosed and taken 9 aspirins.”

Ismail said the government does not know the cure to this headache.

Regarding interest rates, he stated, “Three years ago, State Bank’s Policy Rate, which is the benchmark interest rate, was the lowest Pakistan has had in 40 years. Since our government left, SBP’s Policy Rate has been increased from 6.5% to 10%, an increase of more than half in just a few months.”

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