Pakistan's economic crisis is likely to continue due to political instability, inconsistent government policies, and internal security issues.
Islam Khabar quoted the Asian Development Outlook 2022 supplement by the Asian Development Bank (ADB) which predicted that Pakistan's economic condition will deteriorate in the fiscal year 2023. It said that the economy of the country is stuck with a devastating flood while the "economy was already struggling to regain macroeconomic and fiscal stability".
Islam Khabar reported quoting local reports, Pakistan's diplomatic missions in several countries are facing an acute financial crisis after the State Bank of Pakistan (SBP) and the Finance Ministry stopped all payments, including letters of credit. Pakistan's missions in the European Union and worldwide have reportedly written to the foreign ministry in Islamabad, requesting it to release salaries and allowances as soon as possible.
The foreign exchange reserves of Pakistan fell by USD 784 million after the payment of USD 1 billion towards Sukuk bonds. In addition to this, the money that came from people working outside Pakistan to their families has fallen by 14 percent in November this year. The central bank of Pakistan the SBP has released new data which points that the decline in these remittances will continue. They fell from USD 2.5 billion in November in 2020 to USD 2.1 billion in November 2022, according to Islam Khabar.
According to Islam Khabar, such events will affect Pakistan's local industries like textiles, food processing, and services, especially wholesale trade and transportation. In addition, the country faces an energy crisis, low foregin exchange reserves and limited essential crop yield.
Islam Khabar reported, several business experts in Pakistan have been warning that the 'artificial' low dollar rate in the interbank market could cost the country heavily. The current dollar rate in Pakistan's interbank market stands at approximately PKR 224.71, but the open market offers a much higher rate. The grey market in Pakistan is reportedly offering PKR 255 per dollar, while local banks provide PKR 224.71 per dollar in Pakistani Rupee.
Politicians in Pakistan have been blaming each other amid the economic crisis in Pakistan. Analysts in Pakistan blame the Pakistan Democratic Movement (PDM) coalition government specifically Pakistan's Finance Minister Ishaq Dar. As they could not stabilize the country's economy since it came to power in April 2022.
Islam Khabar quoted the current prime minister of Pakistan Shehbaz Sharif. He claimed that "Pakistan will not default" further he said that their government had to accept the International Monetary Fund (IMF) loan conditions because the previous Pakistan Tehreek-e-Insaf (PTI) government could not keep their commitments.
In another statement, Federal Minister for Planning and Development Ahsan Iqbal made a plea in a press conference that "everyone has to gather on a single-point agenda for strengthening the national economy", according to Islam Khabar.
PTI chief Imran Khan said in a statement that that former army chief General (retd) Qamar Javed Bajwa "did to Pakistan what no enemy could do to the country", and warned that if Pakistan defaults, then the country's national security was the first area to get affected. This can be a problem as Pakistan forces have been facing border clashes with the Taliban on the Afghanistan border.
Pakistan officials also blame the ongoing Russia-Ukraine war for the energy crisis saying that there is a lack of energy tenders in the international market offering an acceptable price range.
( With inputs from ANI )
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