Pakistan Economic Crisis: Pakistan is currently going through a severe economic crisis. The country’s economy is in bad shape, inflation is at its peak. It is also very difficult for people in Pakistan to get things of daily use. The country facing severe shortage of foreign exchange reserves has stood on the verge of bankruptcy. Even after taking loan from Saudi Arabia, UAE, there is no sign of improvement in the situation.
Foreign Exchange Reserves of Pakistan has reached the lowest level of the year 2014. According to media reports, Pakistan has enough foreign exchange reserves for imports for about 3 weeks.
Inflation at its peak in Pakistan
The economic condition of Pakistan is getting worse day by day. People’s condition is miserable due to inflation. Due to the shortage of wheat, the prices of flour are on the sky. Flour mills are not supplying sufficient number of flour packets. Inflation has broken the back of the common man. The prices of milk, meat to oil and food items are going out of the budget of the people. Many families are standing on the verge of starvation.
risk of default
The Shahbaz government of the country, which is already under debt, is now requesting help from other countries and international agencies. Even after taking loans from Saudi Arabia, United Arab Emirates (UAE), dark clouds of default are hovering over Pakistan. According to some media reports, Pakistan has foreign exchange reserves left to pay for imports for only three weeks.
What is the way in front of Pakistan?
To get rid of inflation and economic crisis, Pakistan now has only one last option left and that is – financial assistance from IMF. Pakistan can once again knock on the door of the International Monetary Fund (IMF) for a new loan. However, it is believed that like Saudi Arabia and UAE, IMF is no longer going to provide loan to Pakistan so easily. Fulfilling the conditions set by the IMF can also prove to be extremely difficult for the Shahbaz government.
What will be the effect of accepting the conditions of IMF?
Inflation is already at its peak in Pakistan. In such a situation, if Pakistan accepts the conditions of the International Monetary Fund (IMF), then inflation may increase further. Apart from this, the tax burden on the people will increase. The Shehbaz Sharif government of Pakistan may have to face the displeasure of the common people due to further increase in inflation and increase in taxes. In such a situation, there is confusion in front of Shehbaz Sharif regarding the bitter pill of IMF.
Shipping Agents Alert!
In Pakistan, the situation may worsen due to the anti-people conditions of the IMF demanding increase in energy prices and tax hike. However, it is also certain that without the consent of America, the IMF is not going to budge a bit. On the other hand, the cash crunch in Pakistan has deepened so much that even shipping agents have warned to stop their services.
Abdul Rauf, chairman of the Pakistan Ship Agents Association, has written a letter to Finance Minister Ishaq Dar saying that the disruption in shipping services is a threat to international trade. If such a situation arises, then there is every scope for the country’s exports to come to a standstill. The crisis is likely to deepen further.
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