Ahsan Iqbal says Pakistan faced “internal default” in April 2022

Planning Minister Ahsan Iqbal said Pakistan effectively went through an “internal default” in April 2022, describing a moment when the finance ministry, in his account, told the government it could not release the final tranche of the development budget due to a cash shortfall.

Speaking on Geo News’ programme “Geo Pakistan,” Iqbal linked the episode to the closing phase of the Imran Khan-led administration, which was removed through a no-confidence vote in early April 2022.

Iqbal argued that the economy has since stabilised under the PML-N-led coalition, pointing to improvements he said were reflected in ratings actions by international agencies and a sharp fall in inflation from around 38% to about 4%. He added that Pakistan’s ongoing IMF arrangement is expected to run through 2027.

Discussing policy direction, the minister said the government reduced duties in sectors it believes can expand exports and eased imports of machinery and raw materials to raise productive capacity. He said such measures typically lift imports first, but that the goal is for industrial inputs to translate into higher exports in later quarters.

On public relief and taxation, Iqbal said heavier taxes on salaried workers were imposed under IMF-related pressure, while claiming the number of tax filers has risen substantially. He described broad-based taxation as essential and said digitisation would help authorities compare lifestyle and spending patterns with declared income.