Karim Madad

An agreement between Pakistan and the International Monetary Fund (IMF) would only bring a temporary financial relief, but in the long term, it would result in more inflation and unemployment, says a renowned financial expert. Former Finance Minister Dr Salman Shah said while talking to WealthPK that the IMF wants Pakistan to bring down the primary or fiscal deficit to 0.5% to conclude a staff-level agreement. He said the IMF also wants reduction in circular debt of the country, and diversion of economy towards exports besides stabilising the exchange rate.

Dr Salman said that to achieve these objectives, the government has to put burden on the people in the form of taxes, which would further increase inflation and unemployment ratio. The renowned economist said that due to high inflation and poverty, the government has to increase funds under Benazir Income Support Programme (BISP) from the current Rs400 billion to cater to the needs of the poor.

Dr Salman said the government should take measures to set up water and power system for generating cheap electricity besides using Thar coal to achieve this objective. The former finance minister said that the next six months would be difficult for the people of Pakistan due to the imposition of taxes to meet the IMF conditions. He called for taking help from China by requesting rollover of debts to meet its debt and external foreign trade-related obligations.

Credit: Independent News Pakistan-WealthPk