Islamabad
\nThe Finance Ministry on Saturday rebutted economist Atif Mian, claiming that he has \u201cno idea\u201d how \u201cpractical economics operates in practice\u201d.
\nMian, in a series of tweets, called on Pakistan to \u201ctake decisive actions, aggressively restructure and take courageous actions\u201d.
\nHe also stated that Pakistan was making \u201cnon-sensical policy choices\u201d as he compared the country with Ghana and Sri Lanka.
\nHowever, the ministry believes that the Princeton economist had made a \u201cveiled suggestion\u201d for Pakistan to \u201cdeclare default\u201d.
\n\u201cThis is a misplaced criticism made from a purely theoretical point of view. The gentleman has no idea how the practical economics operates in practice. His comparison with Ghana and Sri Lanka, is also misplaced given the incomparably small size of their economies and populations relative to Pakistan,\u201d said the ministry in a two-page rebuttal.
\nAccording to the rebuttal, it was stated that Mian did not care to \u201canalyse\u201d the structure of Pakistan\u2019s debt which it stated was less than 10% in commercial bonds\/sukuks and with the next maturity falling due in April 2024.
\n\u201cThe rest of the debt is owed to the multilateral and bilateral creditors. Both these classes of creditors are engaged with Pakistan and none has assessed that Pakistan should default,\u201d said the ministry.
\nThe ministry further contended that the economist has \u201ccompletely ignored the deep-rooted reforms Pakistan has undertaken in the last 9 months\u201d. The reforms cited include market exchange rate, interest rate adjustments, mid-year taxation to improve fiscal position, imposition of a levy on petroleum products and non-monetisation of fiscal deficit.
\n\u201cAll these actions were undertaken under an IMF program which was unprecedented as never in country\u2019s history such front-loaded conditionality was imposed. However, we accomplished it through heroic efforts. It is unfortunate that despite such actions, the staff level agreement (SLA) has still not been reached delaying the release of 9th review tranche.
\nThe country is surviving economically and would continue to survive. What Pakistan has done is decisive and courageous; we would continue to walk the road to reforms to stabilise our economy and, in course of time, to steer it toward the path of sustainable growth,\u201d said the ministry.
\nThe ministry also slammed Mian for doing an \u201cunwarranted\u201d comparison of the nominal exchange rate. It added that Pakistan\u2019s real exchange rate is currently estimated to be 15% undervalued.
\n\u201cThe nominal rate is the result of speculation, market manipulation and general distraught from political instability. The undervalued exchange rate is reflective of the fact that underlying fundamentals are improving,\u201d said the ministry. It also added that petroleum products were being sold at a \u201csignificantly\u201d lower price than other regional countries.
\nThe rebuttal also contended that it was \u201cunwise\u201d for the government to impose an additional petroleum levy on it had already achieved a petroleum levy of Rs.50.
\n\u201cThe author has cited this as an example of non-sensical policies. This is simply a misplaced example,\u201d said the ministry.
\nWhile further defending the country\u2019s economic performance, the ministry stated that Pakistan\u2019s economy has \u201csuffered because of international shocks of COVID, Ukraine War and devastating floods of last summer\u201d.
\n\u201cThe author is also oblivious to unprecedented political challenges faced by the country. We are not living in calm and serene times. The present situation has major repercussions for the economy. With political stability likely to emerge soon, there would be a major economic turnaround,\u201d said the ministry.<\/p>\n","protected":false},"excerpt":{"rendered":"
Islamabad The Finance Ministry on Saturday rebutted economist Atif Mian, claiming that he has \u201cno idea\u201d how \u201cpractical economics operates in practice\u201d. Mian, in a series of tweets, called on Pakistan to \u201ctake decisive actions, aggressively restructure and take courageous actions\u201d. He also stated that Pakistan was making \u201cnon-sensical policy choices\u201d as he compared the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-333909","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n