ISLAMABAD: The government’s key coalition partners have encouraged it to take tough decisions amid a difficult economic situation, as Prime Minister Shehbaz Sharif prepares to chair a federal cabinet meeting on Tuesday and continue consultations with his allies on how to deal with the political and financial situation.
The prime minister met the top leaders of his government’s main coalition partners after returning from his visit to the United Kingdom and United Arab Emirates.
The country has witnessed the highest trade deficit of $39.26 billion in the first ten months of the current fiscal year (FY22) while its current account deficit has reached $13 billion and foreign reserves stand at $10.49 billion.
Under the circumstances, Pakistan is in dire need of external financing, though its best option is resumption of the International Monetary Fund’s $6 billion loan program which is contingent on the government’s decision to roll back fuel and power subsidies that is likely to increase the inflation rate which stood at 13.4 percent in April.
“Three main ruling coalition partners — Pakistan Peoples Party (PPP), Muttahida Qaumi Movement (MQM) and Jamiat Ulema-i-Islam-Fazl (JUI-F) — on Monday assured the government of their support in taking ‘tough’ decisions,” reported Dawn newspaper.
“One of the most difficult paths the government is likely to take is the withdrawal of subsidy on petrol and its price is likely to jump by Rs50 per liter,” it added. “Presently, the government is reportedly bearing over Rs100 billion a month by providing subsidies on petroleum products.”
According to Radio Pakistan, the prime minister told the JUI-F leader Maulana Fazlur Rehman that the government would “keep the national interest above all during its decision making.”
He also agreed to take measures to provide relief to people from inflation while leading the country toward economic stability.
The prime minister also expressed concern over the country’s dwindling foreign currency reserves and depreciating currency, asking policy makers in a separate meeting to devise a comprehensive strategy to deal with the situation.