Pakistan no longer faces default risk, NA told.

ISLAMABAD -- Amid claims by former prime minister Imran Khan that default is staring Pakistan in the face and reports about delay in formal talks with IMF on the ninth review of $7bn loan programme, Minister of State for Finance and Revenue Aisha Ghaus Pasha assured the nation on Friday that the country was not facing any danger of going to default.

The minister held out the assurance in the National Assembly when Mussarat Rafiq Mahesar of Pakistan Peoples Party (PPP) put a direct question to her, 'If Pakistan is going to default?'

'Alhamdulillah [Thank God], there is no such possibility. Yes, we were worried when we took over the government [in April] because at that time the IMF programme was suspended and the avenues of getting external finances were closed for us,' said the minister.

However, she claimed, the situation had improved a lot after the government took some 'very difficult decisions' and revival of the IMF programme.

Ms Pasha said it was a fact that the country in the past was unable to borrow money from other multilateral and bilateral agencies and even commercial market to finance its external needs due to the suspension of IMF programme.

However, she pointed out, after the successful seventh and eighth reviews of the IMF programme, there was no immediate threat of Pakistan going to default. Instead, she claimed, the country's exports had improved, foreign remittances were coming and foreign direct investment was getting better.

The minister stated that Pakistan was now on the IMF's track and committed to its programme.

In response to another question, Ms Pasha informed the house that at present Pakistan's 50 per cent economy was estimated to be undocumented. However, while quoting different research studies, she said the size of Pakistan's informal economy was estimated to be 35.6pc.

According to the World Bank, she said, the informal sector was one-third of the country's GDP (Gross Domestic Product).

She said efforts were being made to enhance the size of formal economy, adding that a well-structured taxation policy and effective enforcement thereof could play an important role in achieving this objective. The government was making all out efforts to bring reforms to the tax collection system in a bid to generate...

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