Prime Minister Imran Khan on Friday said that the current issue of inflation in Pakistan was due to the flawed economic policies of the previous government and the cash-strapped nation would overcome the problem soon.
Addressing a public gathering in his hometown of Mianwali in Punjab province, Khan said his government had inherited multiple economic issues, including low foreign exchange reserves, a huge circular debt and fiscal and current account deficits from the previous government.
Pakistan's economy was in a bad shape when the Pakistan Tehreek-e-Insaf government came to power in August 2018. On November 8, the International Monetary Fund (IMF) reached an accord with Pakistan to complete the first review under the extended agreement that will allow significant funding to the cash-strapped country from bilateral and multilateral partners.
"The previous administration had been spending reserve dollars to stabilise and maintain the value of the local currency against the dollar," he said. Khan said Pakistan Tehreek-i-Insaf (PTI) government had not found enough dollars to follow suit so a correction strategy followed.
"As a result, the value of the rupee against the dollar depreciated by 35 per cent," he said, adding that the devaluation opened the floodgates for inflation. Khan said the country's economy was on a correction course and the measures taken by government's economic team started yielding results. "The Rupee stabilised and the current account deficit was reduced for the first time in four years," he said.