ISLAMABAD: Planning Minister Ahsan Iqbal confirmed on Friday that Pakistan “virtually” experienced an internal default during the PTI-led government in April 2022. He revealed that the Ministry of Finance informed the government it had no funds to release the final instalment of the development budget.
The internal default occurred during the last days of the Imran Khan-led government, which was removed from power through an opposition no-confidence motion on April 7, 2022. Speaking on Geo News programmed “Geo Pakistan,” Ahsan Iqbal said the economic situation at that time was critical, with officials warning that Pakistan could face an external default within weeks.
Iqbal highlighted the severity of the situation, stating that on April 1, 2022, the Ministry of Finance for the first time in Pakistan’s history refused to release development funds due to lack of money. He termed this moment as a “virtual internal default” in the country’s fiscal history.
The minister also praised the economic recovery under the current PML-N-led coalition government. He cited improvements in key indicators, noting that international credit rating agencies such as Fitch, Standard & Poor’s, and Moody’s upgraded Pakistan’s rating. Inflation, which had surged 38 percent under the previous government, has since been reduced to around 4 percent, he said.
Iqbal explained that the economy, which was stagnant at zero growth, posted 3.7 percent growth in the first quarter of the current fiscal year. Large-scale manufacturing is also on the rise. He emphasized that the government’s IMF programmed is planned to continue until 2027 and has guided policy decisions to improve economic stability.
The minister detailed budgetary measures aimed at boosting exports, including reducing duties in key sectors and liberalizing imports for machinery and raw materials. These steps are expected to lift exports in the coming quarters as imported machinery and raw materials begin production for exporting goods.
On the topic of public relief, Iqbal said that taxes on the salaried class were imposed under IMF requirements, but the number of tax filers has almost doubled. He added that further relief is planned for the next budget. Digitization of records helps authorities match lifestyle and spending patterns with tax compliance.
Ahsan Iqbal’s statements confirm that Pakistan faced a serious internal default in April 2022, but policy measures and reforms have contributed to a significant economic turnaround since then.
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