ISLAMABAD: Asserting that the economy was improving, Federal Minister for Finance and Revenue Miftah Ismail stated on Wednesday that the government has adopted result-oriented steps to balance imports with exports and remittances.

“We’re attempting to make imports almost equivalent to exports and remittances,” he added. We don’t have the space in our foreign exchange reserves to lower them, and we don’t have any other resources. “As a result, we aim to create a balance between imports, exports, and remittances,” the federal minister stated during a news conference.

According to the minister, the administration launched initiatives to cut imports quickly after taking office, and it was successful in June when the non-energy import bill was lowered by 15%.

However, he continued, energy imports climbed owing to price increases in the international market, with import expenses increasing by 120 percent last month. He stated that imports totaled $7.4 billion last month, including $3.7 billion in energy and $3.7 billion in other imports.

He stated that the government has taken several measures, including increasing LC margins and prohibiting the sale of assembled autos and mobile phones. It also slowed down local manufacture of automobiles, trucks, and refrigerators. It also made obtaining clearance from the State Bank of Pakistan for a $1 lac LC essential.

All of this paid off, as there were just $2.609 billion in imports until July 18, indicating that there would be no more than 5.5 billion imports during the month. It was $7.5 billion last month, therefore it was lowered by $2 billion. He also stated that the current account deficit will be reduced.

According to the minister, Pakistan could not afford a $48 billion trade deficit and a $17 billion current account deficit last year. However, it is heartening that the government’s initiatives have helped curb imports.

He stated that when fuel was supplied at a subsidy, many merchants stockpiled the product for their own profit and that there were presently roughly 60 days of diesel available, as opposed to the customary eight days. As a result, there would be less demand for imports, resulting in lower energy imports. Similarly, worldwide gasoline costs have moderated, which influences the country’s imports.

He stated that the economic basics of trade have been fixed, as imports have almost equaled remittances and exports. There isn’t much CAD that could be funded.

According to the minister, the Extended Fund Facility deal with the International Monetary Fund was on track and nothing could derail it. He stated that Pakistan has previously satisfied all of the fund’s previous standards. He stated that the loan funds will be transferred upon official approval by the IMF board.

He said that this would bring in billions of dollars in finance from the World Bank and the Asian Development Bank.

He stated that the IMF believed a $4 billion financial shortfall still existed, which he remarked would be filled by a combination of sources, including one of the friendly nations offering $1.2 billion in oil finance, which would be settled within a few days.

Similarly, another country agreed to invest $1 to $2 billion in the Pakistan Stock Exchange (PSX), while another promised $200 to $300 million in gas on deferred payments.

Furthermore, he stated that another friendly country had offered $2 billion in deposits, yet another friendly nation had offered 2 billion SDRs (more than $2 billion).

Concerning the rupee’s devaluation, the minister stated that the local currency has declined against the dollar while strengthening against the pound, euro, and Japanese yen. According to him, the dollar has enjoyed 22 years of strong appreciation versus all currencies. Miftah did, however, concede that the country’s present political turmoil was one of the causes of the rupee’s decline.

According to the minister, citing the SBP, the rupee has declined by 3% in terms of the real effective exchange rate since December, taking inflation into account.

According to the minister, the economy is doing well overall. The income collection was Rs751 billion in June 2022, a 30% increase, with the government additionally paying Rs40 billion to DLTL and Rs35 billion to exporters. Large-scale manufacturing was likewise on schedule.

Miftah also highlighted the government’s determination to increase the tax-to-GDP ratio while reducing the budget deficit within a few months.

Miftah stated that the government incentivized agriculture to increase wheat output. He said that the government had acquired 5 million tonnes of wheat and permitted the import of an additional 3 million tonnes to establish strategic reserves.

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Similarly, it imported 0.2 million tonnes of urea at the lowest possible price of $500. The minister stated that the decision to export extra sugar would be complete after conferring with the Sugar Advisory Board.