Pak finance minister Ismail warns of default if subsidies not abolished till July

Islamabad [Pakistan], June 14 : Finance Minister Miftah Ismail on Monday said that Pakistan would default if the government did not abolish subsidies on petroleum products till July.
Ismail said that he had told Prime Minister Shehbaz Sharif to take a tough decision in order to avoid becoming another Sri Lanka, which is currently in economic turmoil. He said that there will be no IMF deal if the petrol products subsidy was not abolished.
Speaking during Geo News' programme "Capital Talk", the finance minister said the International Monetary Fund (IMF) has insisted on abolishing the subsidies on petroleum products.
Ismail also blamed the ousted government of Imran Khan for not striking a good deal with the IMF. "The PTI did not strike a good deal with IMF," said the finance minister.
In a bid to bring economic stability and revive the stalled multi-billion-dollar IMF programme, the government had increased the price of petrol by a whopping Rs 60 per litre last month.
It was also expected that after the budget, some hurdles would be removed in the IMF programme's revival. But the finance minister last week said the IMF "was still unhappy with the government over the budget" mainly because it did not implement the Personal Income Tax (PIT) measures suggested by it, reported Geo News.
Miftah had also said last week that there was no financial emergency in Pakistan after the government took steps to rectify the ongoing economic turmoil and increased the price of petrol.
But in today's interview, the finance minister said if the government does not increase the prices, the IMF will not strike a deal with Pakistan, and if this happens, then the country will be pushed toward "destruction," reported Geo News.
"I have told the prime minister that we have to take tough decisions. The prime minister is unhappy with increasing the prices of petroleum products. Whenever I send a summary in this regard, the ministers curse me," Miftah lamented.
The finance minister claimed that the government was still giving Rs 19 subsidy on petrol and Rs 53 subsidy on diesel, adding that Sri Lanka also gave subsidies to its public and it, eventually, defaulted, reported Geo News.
"Today, Sri Lanka is purchasing expensive oil and they do not have funds to buy medicines for their people," the finance minister said as he warned of a similar situation in Pakistan.
Miftah added that the PTI government did not make the decisions it agreed upon with the IMF. "We are in talks with the IMF; the PTI did not strike a good deal with it."
He said that once the agreement with the IMF is reached and Chinese banks extend their loan facility to Pakistan, the market will regain confidence.