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Grim scenario ahead for Pakistan | Dt Next

Pakistan is facing its worst economic crisis since its birth and a grim scenario dodges Islamabad in 2023 amid rising foreign debts, inflation, and falling foreign exchange reserves, writes Federico Giuliani in Inside over.

Moreover, Pakistan is not yielding any sign, internal or external, of an early improvement.

The year saw its exports falling, its imports spiking, high double-digit inflation and its foreign exchange reserves held by the State Bank of Pakistan (SBP) continuing their declining spree, plunging by USD 584 million to reach USD 6.1 billion.

According to the central bank's data, this is the lowest level of reserves since April 2014. Pakistan is worse off even among economies currently doing badly and has reserves only to last 30 days' imports.

It also saw multiple postponements by the International Monetary Fund (IMF) to evaluate and disburse USD 1.6 billion, which is only a fraction of the six billion Pakistan has been seeking for many months.

Adding to the woes of successive governments in Islamabad, the IMF remains cold to the urgent needs of Pakistan even as it stipulates - and secures - the imposition of stringent measures to make the economic recovery.

These measures, especially rising fuel prices, have contributed to high inflation and politically, have proved the most unpopular.

Amidst all this, while the Shahbaz Sharif Government makes tall claims and promises, the Imran Khan-led opposition that had contributed in no mean terms to the worsening of the situation, baits the government with anti-American and anti-West rhetoric, knowing well the money would have to come only from them.

Further, Foreign Minister Bilawal Bhutto Zardari was unable to either ensure political stability and security from terror outfits - two of the preconditions for any investor when in early December he positioned Pakistan as a foreign investors' haven.

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