Pak new FM claims Imran Khan pushed economy into ‘subsidy’ trap

INTERNATIONAL DESK: Accusing former Pakistan Prime Minister Imran Khan of setting a trap for his successors by announcing heavy subsidies on fuel weeks before his ouster, Finance Minister Miftah Ismail has said that the government will have to withdraw the subsidies to revive the stalled bailout programme with the International Monetary Fund (IMF), said a media report.

Ismail, who is visiting the US for talks with the financial institution, said that the government will have to increase the price of gasoline to get Pakistan’s economy back on track, reported the Dawn newspaper.

Noting that the IMF wants Pakistan to withdraw the fuel subsidies given by the previous Imran Khan government, Ismail said that he agrees with them and the government was ready to act on IMF’s directions.

“They’ve talked about removing the subsidy on fuel. I agree with them. We can’t afford to continue with subsidies. So, we’re going to curtail this,” the media outlet quoted him as saying at the Atlantic Council, referring to his first meetings with the senior IMF officials.

Expressing the government’s inability to continue the subsidies on petroleum products, Ismail blamed Imran Khan for trying to sabotage the new government by announcing heavy subsidies on fuel towards the end of his tenure.

“The only aim of the government is to bring economic and fiscal stability. Measures will also be taken, phase-wise, to increase exports of the country,” the media outlet quoted him as saying.

This comes as the IMF had approved a USD 6 billion loan for Pakistan in 2019 but concerns regarding the pace of the fund-mandated reforms have delayed its disbursements.

Ismail said that he was looking forward to an early agreement with the IMF on the seventh review of the loan package. The sixth review was completed in February when the fund agreed to the immediate release of USD 1 billion for Pakistan.

Notably, soon after his appointment as the finance minister, Ismail had said that the subsidy allowed on petrol for May and June would cost Pakistani rupees 96 billion, and the “government cannot bear this burden”, according to the media outlet. (ANI)