ISLAMABAD: Federal Minister for Finance and Revenue Ishaq Dar said on Tuesday Pakistan’s economy was in “safe zone” after a substantial reduction in current account deficit which stood at $2.56 billion at the end of the last fiscal year.
Pakistan faced major political and financial crises that gained pace in the second quarter of 2022 and hit the fragile economy, making experts warn of a possible default amid a severe dollar liquidity crunch and rapidly depreciating national currency.
The government continued to strive for the resumption of a stalled International Monetary Fund (IMF) loan program which materialized last month when the two sides reached a standby agreement of $3 billion, providing a much-needed economic relief to the country.
Pakistan also witnessed a $4.2 billion increase in its official forex reserves in the ongoing month after substantial amounts were deposited in its central bank by Saudi Arabia, the United Arab Emirates and the IMF.
“Pakistan is in the safe zone,” said the finance minister in a brief televised statement wherein he mentioned the current account deficit of $2.56 billion at the close of the last fiscal year (FY23) was 14.65 percent of $17.48 billion where it stood by the end of the financial year before that (FY22).
“This has happened due of the management of Prime Minister Shehbaz Sharif’s administration which also saved Pakistan from default,” he added. “Not only did the country make all its external payments on time but also ensured that we were nowhere close to a default.”
Dar also mentioned the government’s objective to restore the country’s foreign exchange reserves to the same level they were when it assumed power last year by the end of its constitutional tenure.
