Pakistan Democratic Movement’s (PDM) spokesperson Hafiz Hamdullah, on Sunday, warned the Pakistan Tehreek-e-Insaf (PTI) that the general polls, expected to be held in October 2023, can be postponed if the country’s economy does not recover.
The Jamiat Ulma-e-Islam’s (JUI-F) leader said that the country was financially restrained when the “forcefully imposed” PTI was ousted.
Pakistan is striving to strengthen its plunging foreign exchange reserves, currently at $4.601 billion, just enough to pay for only four weeks of imports.
After a decline of 22.11% in the week ending on January 6, the State Bank of Pakistan’s (SBP) reserves have dropped to the lowest level since February 2014.
The country is in severe need of foreign aid to shrink its current account deficit as well as have adequate reserves to pay its debt obligations for the ongoing financial year.
The central bank’s reserves until January 6, fell $1.233 billion, or 22.12% to $4.343 billion, down from last week’s $5.576 million.
The political uncertainty in the country has had severe adverse effects on the economy, with the local currency plunging and inflation at decades-high levels. Devastating floods and a global energy crisis have added to the existing crisis.
Pakistan looks at IMF again
The government, amid a severe reserves crunch, seeks to pass the ninth review of the International Monetary Fund (IMF) to secure a $1.1 billion bailout package.
Pakistan shared the basic contours of negotiations with IMF high-ups amid anticipations of virtual talks between both sides from next week.
While virtual talks are expected to kick-start on Monday it is not yet known whether the upcoming talks will be formal or informal. If formal talks begin, it will be a significant development as informal talks had continued during the last two and a half months.
One top official of the Finance Division also confirmed to The News that the government shared the basic contours of the upcoming round of talks with the IMF Mission Chief Nathan Porter.
Pakistan and IMF would discuss fiscal consolidation, including taking additional taxation measures and curtailing expenditures to restrict the budget deficit within the envisaged limit agreed upon with the IMF.
Taking all required corrective measures to devise a sustainable roadmap for cash bleeding energy sector, curtailing the flow and stocks of the circular debt, hiking tariffs of electricity and gas sectors, and bringing the exchange rate aligned to the free market mechanism would also be discussed.
The official further added that the IMF’s mission chief informed Pakistan about their readiness to hold virtual talks next week, and the review mission could also visit Pakistan if needed.
“If all thorny issues are resolved in virtual meetings, then the staff-level agreement might be struck without paying a physical visit in the next seven to 15 days,” the top official said.
PTI demands snap polls
On the other hand, PTI, since its government was overturned through a vote of no-confidence in April last year, has continuously demanded the federal government call for elections.
PTI chief Imran Khan, who was ousted through a no-trust vote, reiterated the need for fair and transparent snap polls as the foremost solution to the crises.
The PDM-led government’s stance on conducting elections on time remains unchanged.
PTI, since its ouster, launched two unsuccessful long marches — in May and October 2022 — to force the government to conduct snap polls.