Federal Minister for Planning and Special Initiatives Ahsan Iqbal has said that businessmen had struggled to open letters of credit in 2022 as foreign exchange reserves dwindled and the treasury was left “virtually empty”, 24NewsHD TV reported on Tuesday.
Addressing the launching ceremony of the “Uraan Pakistan” programme, at Federation of Pakistan Chambers of Commerce and Industry (FPCCI) office, he claimed that Pakistan narrowly avoided an internal default in early 2022 after inheriting a deeply fragile economy marked by empty state coffers, severe trade imbalances and stalled imports.
Iqbal said the country’s trade deficit had surged to around $50 billion, pushing Pakistan to the brink of an internal default by April 1, 2022.
“The finance ministry had even refused to release funds at that time,” Iqbal said, adding that the government took over an economy “on the edge.”
Iqbal said his government had since taken “tough but necessary decisions” to stabilise the economy, describing them as “bitter pills” required to put Pakistan back on its feet.
According to the minister, inflation was brought down to 2% from a peak of 38% over the past two years, while the policy interest rate was reduced from 23% to 10.5%.
He said international financial institutions had upgraded Pakistan’s economic outlook, with global lenders and rating agencies acknowledging the country’s recovery.
“International institutions are praising Pakistan’s economy today, and the world is recognising our efforts,” Iqbal said.
However, he criticised what he called attempts from within the country to undermine this recognition.
Referring to a recent press conference by a member of the business community, Iqbal said the remarks created an impression of chaos and instability.
“It felt as if the country was in complete turmoil,” he said. “I do not know what agenda they were pursuing.”
Iqbal warned that projecting economic instability at a time of recovery could damage Pakistan’s credibility, urging stakeholders to act responsibly as the country seeks sustained growth.