Pakistan / Big blow to PAK, which is reeling in economic crisis, IMF could not take decision on bailout package

Zoom News : Feb 10, 2023, 03:23 PM
Pakistan News: IMF's bailout package is the last hope for Pakistan surrounded by economic crisis, but it seems that the country will have to wait more for this. After 11 hours of talks between Pakistan and the International Monetary Fund (IMF), no final decision could be taken on a $1.1 billion deal aimed at saving the country from bankruptcy.

According to the BBC report, the deepening economic crisis has emptied Pakistan's foreign exchange reserves. The country has barely enough dollars left to cover one month's imports. The country is making efforts to get foreign loans.

The IMF team, which returned from Islamabad on Friday, said that a lot of progress has been made after 10 days of talks. IMF mission chief Nathan Porter said in a statement, virtual discussions will continue in the coming days. Since 1975, the annual inflation in Pakistan exceeded 27 percent in January.

historic fall in pakistan rupee

This week, the Pakistani rupee (PKR) fell to a historic low of 275 against the dollar, down from 175 a year ago, BBC reported. This made it more expensive for the country to buy and pay for things.

Lack of foreign exchange is one of the most serious problems of Pakistan. Businesses and industries across Pakistan said they have had to slow down or stop work, while also waiting for the goods they imported, which are currently stuck in ports.

In late January, a minister told the BBC that more than 8,000 containers containing everything from medicine to food were lying in Karachi's two ports. According to local media reports, some of this has started to clear up, but a lot is still stuck.

Pakistan troubled by rising global fuel prices

Significantly, Pakistan, like many countries, is troubled by rising global fuel prices as a result of the coronavirus pandemic and Russia's invasion of Ukraine. Pakistan relies heavily on imported fossil fuels and importing food has also become more expensive.

The BBC reports that if the PKR depreciates, fuel costs more, with knock-on effects for transport or manufactured goods. The government recently raised fuel prices by more than 13 percent, but says it is not planning to do more.