ISLAMABAD, MAY 13 (DNA) – Senior PML-N leader and former Federal Minister of Finance, Revenue and Economic Affairs Miftah Ismail has said that the government deal with the IMF will lead to free float of the Pakistani rupee.

Giving his assessment of the deal he said the Fund statement doesn’t mention that prices of gas and electricity will go up, but insiders say that’s also been agreed.

“The Fund statement also doesn’t directly mention interest rate hike but that’s also expected,” he said.

“PTI has ruined the economy really fast due to its incompetence. The Prime Minister was right to fire Finance Minister Asad Omar. But now this will mean that the adjustment programme will be very hard for the poor and the middle classes,” he tweeted.

He said this year deficit will be about 2.5% of GDP so the government requires 800 billion rupees in new taxes. “Accounting for inflation, next year would require additional taxes of over Rs 1000 billion, which is over 25% increase. This will cause widespread hardship, unemployment and inflation,” he said.

He said the slowdown of the economy will increase poverty and the Benazir Income Support Programme spending will go up, otherwise “we will see  massive increase in malnutrition and stunting.”

Ismail said IMF wants letter from other donors that they will give more loans, which means that China will have to assure IMF that it will re-roll its loans.

The PML-N leader was of the view that the IMF mentions progress towards money laundering and counter financing of terrorism. “This suggests that the Fund will now also look at FATF decisions.”

He recalled that during the last IMF programme under PML-N the government was able to increase GDP growth and reduce inflation. He hoped PTI can emulate PML-N’s example. “But it looks that they won’t be able to increase growth. I just hope they are able to control inflation,” he said. = DNA

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