Pakistan has been in a financial mess since a long time now. Speculations are being made regarding a possibility of an economic default and the latest news has added to the already stressful environment in the country. The foreign reserves of Pakistan are now down to 4.24 billion dollars which is an approximate weekly down trend of 7.7%. The reserves have fallen by $354M.
Image by Uzairmaqbool from Pixabay
Pakistan is buried under debts taken by governments of all times. The country has to payback its debts and the current scenario is a death note to the financial position of Pakistan. Recently, IMF has been putting forward its concerns and terms for continuation of the loan program that is much needed by Pakistan to survive in this scenario.
Fahad Rauf, Head of Research of Ismail Iqbal Securities, recently claimed that Pakistan's financial prosperity was dependent of IMF's loan revival. As reported on Tribune, the liquid currency reserves of Pakistan are currently on the $9815M mark and the net reserves (in terms of those reserves held by the bank) are standing at $5571M.
The country is currently in a dark place. With devaluing rupee and increasing costs of production, Pakistan is moving towards more trouble. The rupee depreciated to 280 per dollar (30th March 2023) and is expected to depreciate further, up to 400 per dollar mark if steps are not taken to stabilize the economy.
The cost of basic necessities have increased and the lower income group of the country has been suffering due to the ever increasing inflation. A major reason behind increasing costs of basic items is the increased transportation costs due to higher fuel prices. As of today (31st march 2023), fuel price in Pakistan is PKR 272/Ltr.
The economic downfall of Pakistan is expected to continue for some time and the country is slowly moving towards recession. Can Pakistan save itself from becoming bankrupt? Or will the world witness another Sri Lanka like situation?