After Sri Lanka, Economic Crisis Looming on Pakistan? Country’s Finance Minister Warns ‘Bad Days Ahead’

0 7

Karachi/New Delhi: Even as one of India’s prominent neighbours – Sri Lanka – continues to battle a severe economic crisis, another one seems to be falling under a similar shadow. Pakistan’s Finance Minister Miftah Ismail on Friday said the government would continue to curb imports for the next three months, as he warned of “bad days” ahead for the cash-strapped country, reported news agency PTI.Also Read – Meta Shuts Pakistan Hackers Targeting Indian Officials Via Honey Trapping, Malware

Addressing a ceremony at the Pakistan Stock Exchange in Karachi, the minister said the government headed by Prime Minister Shehbaz Sharif was suffering because of the economic policies taken by the erstwhile Pakistan Tehreek-e-Insaf regime led by ousted prime minister Imran Khan. “During the previous Pakistan Muslim League-Nawaz (PML-N) government, the country’s budget deficit was USD 1,600 billion, and in the last four years under the Pakistan Tehreek-e-Insaf regime, that figure ballooned to USD 3,500,” Geo TV quoted Ismail as saying. Also Read – Thanks to Social Media, Mumbai Woman Finds Her Missing Mother After 20 Years in Pakistan

“No country can grow and be stable with this kind of current account deficit,” he asserted. “When you raise the budget deficit and also increase the loans by 80 per cent, it has an adverse impact on the economy,” he explained. “I will not allow imports to increase for three months and, in the meantime, we will come up with a policy. I understand that growth will be reduced for a bit but I have no other choice,” the Dawn newspaper quoted the finance minister as saying. Also Read – Sri Lanka’s Supreme Court Extends Overseas Travel Ban on Mahinda and Basil Rajapaksa Till Aug 11

‘On right track, but might see bad days’

Pakistan’s import bill for the previous fiscal year stood at USD 80 billion, while exports amounted to USD 31 billion. He noted that the current government had to save the country from a possible default and had to take immediate and short-term measures. “Maybe it was unwise in the long-term,” he lamented. “We are on the right track, but obviously we might see bad days. If we control our imports for three months, we can boost our exports through various means,” he asserted.

10 points for this big story on Pakistan’s economy:

  1. The Pakistani rupee appreciated 2.15 against the US dollar for the sixth consecutive session during intra-day trade in the interbank market, to touch 224 against the greenback on Friday.
  2. Since Khan’s ouster in April, Pakistan’s currency has plummeted to an all-time low of 240, amid uncertainty about IMF assistance.
  3. Last week, New York-based rating agency S&P Global revised Pakistan’s long-term ratings from ‘stable’ to ‘negative’ due to spiralling inflation and tighter global financial conditions.
  4. Pakistan reached a staff-level agreement with the IMF last month followed by months of deeply unpopular belt-tightening by the government, which took power in April and has effectively eliminated fuel and power subsidies and introduced new measures to broaden the tax base.
  5. The new government has slashed a raft of subsidies to meet the demands of global financial institutions but risks the wrath of an electorate already struggling under the weight of double-digit inflation.
  6. Pakistan had hoped for a quick revival of the bailout, but the IMF has so far not released the much-needed installment.
  7. IMF’s Resident Representative for Pakistan Esther Perez Ruiz, following the staff-level agreement, earlier this week said the country had completed the last precondition increasing the petroleum development levy for the combined seventh and eighth reviews.
  8. An original USD 6 billion bailout package was signed by former prime minister Imran Khan in 2019, but repeatedly stalled when his government reneged on subsidy agreements and failed to significantly improve tax collection.
  9. Pakistan desperately needs the IMF loan. In July, the fund said it would raise the value of the bailout from USD 6 billion to USD 7 billion if approved by its executive board, usually considered a formality.
  10. Sharif has repeatedly blamed the former prime minister’s government, alleging that Khan – a former cricket star turned Islamist politician – had deliberately violated IMF’s conditions in order to remain popular among followers at home.

(Based on PTI inputs)

Read original article here

Denial of responsibility! News Continue is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave A Reply

Your email address will not be published.