Winning Bizness Desk
Mumbai. Pakistan is on the verge of poverty. Inflation continues to rise as well as rupee continues to record weakness against the dollar and the political situation continues to be volatile making its economy irreparable. The situation is so bad that if it does not get a bailout package from the International Monetary Fund (IMF), then it can make a global default like Sri Lanka. If this happens, it will happen for the second time in the history of Pakistan.
Pak demand a bailout of $3 billion
On Wednesday, talks were held in Doha with the IMF regarding the bailout package. Officials acknowledged that for the loan, Pakistan may have to take many difficult decisions, including increasing the fuel price. "We are confident that we will reach the finish line," Murtaza Syed, the acting governor of the State Bank of Pakistan, said in an interview. Pakistan is demanding a bailout of $3 billion from the IMF.
Not enough foreign reserve even for 2 months of imports
Pakistan's foreign reserves stood at $10.2 billion in April 2022. This is not enough even for two months of imports. If it gets a bailout package from the IMF, then his foreign reserves will increase slightly. CEIC data shows that Pakistan's foreign reserves stood at $19.9 billion in October 2016, which is an all-time high. It reached $96.0 million in January 1972, its lowest level.
Difficult road ahead with IMF
The fight between the government and former Prime Minister Imran Khan has made the road ahead with the IMF difficult. In recent weeks, Imran's party, the Pakistan Tehreek-e-Insaf (PTI), has called for elections to be held a year early to regain power. He is continuously demonstrating with his supporters regarding this. Due to this the economic and political situation in Pakistan is continuously deteriorating.
Fuel prices increased trouble
In an attempt to repair his image, Imran Khan had frozen fuel and gasoline prices for four months, before leaving office in April. Before releasing the new fund, the IMF wants the government to increase the fuel price by eliminating subsidies. However, the new Prime Minister Shahbaz Sharif also deferred raising the prices despite a subsidy of $600 million per month.