Islamabad [Pakistan]: According to the South Asia Press, Pakistan is currently in its most difficult situation in the last two decades. The country is suffering from an economic crisis, political unrest and a rising number of terror attacks along the northwestern areas and has been drained of its resources.
According to the report, the country’s economic deterioration directly impacts the public. The floods in Pakistan came as a severe blow to the cash-strapped nation already grappling with high debt, the South Asia Press reported, adding that the country’s planning commission, agriculture, food, livestock, and fisheries sectors lost USD 3.7 billion in the floods with long-term losses estimated to be around USD 9.24 billion.
The report stated that the country’s inflation rate in December 2022 was 24.5 per cent, nearly double the 12.3 per cent rate from the previous year and that the high price of flour most negatively impacted the common people during the nation’s worst-ever food crisis.
Balochistan, Sindh, and Khyber Pakhtunkhwa provinces have all witnessed widespread grain and flour stampedes. Analysts fear the crisis will soon take petroleum products and basic essential items under its fold.
South Asia Press reports that some experts also hint at possible rationing of petrol and diesel in the next two to three months, ultimately hitting the trade and industry and even the agricultural sector, which needs diesel during the harvesting season.
The twin deficits of the Budget and balance of payments have in the past been managed by reaching out to bilateral benefactors and multilateral institutions, the report noted further, adding that about half of the USD seven billion loan, extended by the International Monetary Fund (IMF) in 2019, has already been disbursed.
International agencies claim that the country’s issues result from governments consistently living beyond their means without increasing domestic resources. The report stated that the delay in the release of the IMF’s next tranche is worsening the country’s problems.
In the absence of any inflows from the IMF or friendly countries, the forex reserves with the country’s central bank dropped to USD 4.34 billion in the week ending January 6, which is the lowest since February 2014.
According to analysts, the reserves are insufficient to pay for one month of imports.
According to a recent analysis by Islam Khabar, the ongoing financial crisis in Pakistan and the economic slowdown in China appear to have affected the progress of the China-Pakistan Economic Corridor (CPEC) project.
According to the research, the CPEC project, which started ten years ago, was anticipated to bring wealth to Pakistan. However, seven years later, many of the CPEC’s projects are still on hold, and some of those that are still functioning have turned into liabilities and are now losing money.
