Quetta: Prime Minister Shehbaz Sharif lamented the burden of debt, stating that it has mortgaged the future of the nation’s generations. He emphasized that it would be a great shame if Pakistan had to return to the International Monetary Fund (IMF) for another loan after three years.
“To break free from this cycle of debt, federal and provincial governments, along with relevant institutions, must collaborate,” he said during a ceremony launching a significant initiative aimed at solarizing agricultural tube wells in Balochistan on Monday.
On a daylong visit to Quetta, the Prime Minister stressed, “If we make this collective effort, future generations will be grateful. However, if we fail to make tough decisions, we will seek assistance from the IMF once again.”
Pakistan is aiming to finalize a staff-level agreement with the IMF for a bailout of over $6 billion this month, having addressed all the lender’s requirements in its annual budget.
The country’s debt has soared since the mid-2000s, due to a failure to invest in a surge of loans from international bondholders and countries like China and Gulf nations into productive, export-oriented sectors.
Finance Minister Muhammad Aurangzeb warned on Sunday that Pakistan would continue to seek IMF bailouts if it fails to boost tax revenue. He expressed confidence in reaching a staff-level agreement with the global lender for a loan estimated between $6 to $8 billion. However, he noted, “But it will not be our last Fund program if we don’t increase our tax revenues,” during an interview with the Financial Times.
Last month, the federal government presented a tax-heavy Rs18.877 trillion budget for the fiscal year 2024-25 (FY25), aiming to boost public revenue and satisfy the IMF’s demands for improved tax collection. The budget aims to raise Rs13 trillion by next July, a 40% increase from the current financial year, to reduce a crippling debt burden that consumes 57% of government revenue through interest payments.
Prime Minister Shehbaz reiterated that turning to the IMF was a necessity, stating that Pakistan had to finalize a deal with the IMF this month. He added, “Tomorrow in Islamabad, I will discuss measures to provide relief to the poor. The federal government stands with Balochistan in its development and prosperity. We will support anyone who genuinely cares for the well-being of Balochistan and Pakistan.”
He emphasized that security and law and order are crucial for attracting investment to Balochistan and Khyber Pakhtunkhwa. Regarding Gwadar, he said: “I am not complaining, but the Safe City project there has been halted. Gwadar, by the grace of God, will prove to be more beneficial than the Reko Diq mines. We are committed to transforming Gwadar into a magnificent port. Together, we will eradicate the scourge of terrorism.”