Pakistan economic crisis latest news

Pakistan's economic woes continue to deepen as the country grapples with a severe economic crisis. Against this backdrop, the recently presented budget for the fiscal year 2023-2024 has projected a modest 3.5 per cent economic growth, described by the finance minister as a "realistic target." However, the budget's fiscal deficit and GDP growth projections reflect the gravity of the situation. Concurrently, Islamabad is actively seeking additional bailout funds from the International Monetary Fund (IMF) to alleviate the growing economic strain. Budget Projections and IMF Bailout Pakistan's finance minister, Ishaq Dar, has emphasised that the 3.5 per cent economic growth projection is intentionally conservative, indicating a cautious approach to economic recovery. While he remains hopeful that Pakistan will pass the upcoming ninth IMF review, he expressed doubt about subsequent reviews. The budget forecasts a meagre GDP growth of just 0.29 per cent, highlighting the urgent need for remedial measures. Furthermore, the fiscal deficit for the next fiscal year is projected to reach 6.54 per cent of the GDP, indicating significant financial challenges ahead. Fiscal Constraints and IMF Review Dar acknowledged the limited scope within the budget to further reduce the fiscal deficit target. He attributed this constraint to the prevailing economic crisis, which has been exacerbated by the lack of timely bailout funding from the IMF. Pakistan faces a series of economic crises, and unl...

LAHORE: To put the sluggish economy on the fast track to recovery, former president Asif Ali Zardari has called for a long-term economic plan, based on collective thinking instead of individual interests and spanning over decades instead of yearly bailouts. The PPP leader also rejected as mere propaganda the reports that Pakistan is spending too much on its defence, pointing out that the issue was not about overspending but of meagre earnings. Speaking to businessmen at the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) here on Wednesday, the ex-president highlighted the need for collective thinking and formulating a charter of economy spanning decades and generations rather than five or 10 years. He quoted the example of China and urged the businessmen to sit together, form investment groups and make a 50-year plan that could also stabilise the national economy. “The economic planning should aim at the welfare of future generations instead of [yearly] bailout. Our coming generations deserve a better economy and the country still has the potential and resources to move forward,” he said. PPP leader calls for long-term economic plan; expresses alarm at sky-high interest rates Assuring the potential investors of a state guarantee for their investments, Mr Zardari said if the opportunity was left only for foreign investors, they would not just invest but would also take out heavy amounts of the capital (as profit). “The big businessmen of Punjab should sit tog...

Synopsis The ongoing turbulence in Pakistan’s economy is making the government and policymakers nervous about the country's future. At the same time, the ineffectiveness of remedial steps in tackling the crisis indicates that the nature of the problem is more structural than transitory. Being deep rooted in the system, these issues are making the prospects of economic recovery look frail. With no easy way out of legacy issues like political instability, corruption, terrorism, law & order and Infrastructure bottlenecks, the country has to repeatedly look outside for financial support. However, looking at the financial, legal and regulatory environment provided by the responsible agencies in Pakistan, it is easier said than done. A While the net FDI into Pakistan stood at $2.6 billion during FY 2019-20, it registered a significant fall of around 30 per cent in FY 2020-21 to reach $1.82 billion. The net inflows could not recover next year as it showed a paltry improvement of 6.3 per cent during FY 2021-21. Moreover, the available data till April 2023 indicates another significant decline in offing during the current Half hearted attempts made for ushering in FDI-friendly measures often get nixed by bureaucratic inefficiency, corruption and extremism. There have been several instances when foreign investors had to or scale down their plans or simply flee the country due to institutional corruption. A holding company from Switzerland, The company had made an investment worth $6...

Pakistan's minister of state for petroleum Musadik Malik said that the country's government cannot give 24x7 gas supply, The News International reported as load-shedding becomes a daily occurrence amid worsening economic crisis. "We cannot provide gas 24 hours as our reserves have dropped," he said adding that the gas load-shedding would end during sehri and iftar. Pakistan Economic Crisis: People ride a motorbike at sunrise in the city of Karachi.(AP) Musadik Malik also said that he would visit to Karachi to resolve the gas supply issue that people are facing . "The gas bill of the rich and poor has been separated; rich people will have to pay more now," the minister said. Read more: Is it for US? Russia on France's ‘don’t deploy nukes on foreign territory' Earlier, Pakistan prime minister Shehbaz Sharif had directed officials to ensure an uninterrupted supply of gas, saying that the process will be supervised and no negligence will be tolerated, the report said. This comes as the Sui Southern Gas Company (SSGC) announced suspension of supplies to power plants and industries last week amid low supply of gas. Volume of gas in pipelines had decreased due to a reduction in supply, it said prompting a response from the Karachi Chamber of Commerce and Industry (KCCI) which called for immediate government action over the shortage of gas supply in Karachi. Industries cannot function without gas and would be forced to halt production, KCCI said. "It's highly unfair to have such a...

The Pakistan government has no intention of freezing foreign currency accounts, the cash-strapped country's state minister for Finance and Revenue said on Monday amidst a severe dollar crunch. Pakistan Economic Crisis: A woman checks rice prices at a main wholesale market in Karachi. (AFP) Talking to journalists outside Parliament on Monday, State Minister Dr Aisha Ghaus Pasha said, "We do not plan on freezing foreign currency accounts, and there have been no proposals to take such an action." In May 1998, the then-government of prime minister Nawaz Sharif froze all currency accounts after the country's first nuclear tests. Pasha said the government had shared the fiscal year 2023-24 budget details with the International Monetary Fund (IMF), and the Washington-based global lender is negotiating with the State Bank of Pakistan (SBP). The Pakistan government on Friday unveiled a ₹14.4 trillion budget for 2023-24 as it battled to fend off a looming default due to shrinking foreign reserves. Pakistan's efforts to unlock access to the already agreed USD 6.5 billion loan package with the IMF are in a quagmire as the budget needs to satisfy the global lender to secure the release of more bailout money for the cash-strapped country. According to experts, the budget will do little to allay the concerns of the Washington-based global lender. "We have told the IMF to conclude the ninth review at the earliest. We have less time and a lot of tension for completing the ninth review," th...

Pakistan's finance minister said that a projection in the country's budget of 3.5% economic growth for the year 2023-2024 was a "realistic target". It was a target "on the lower side", Ishaq Dar said a day after presenting the budget for the country amid economic crisis. The country's budget comes as Islamabad seeks more bailout money from the International Monetary Fund (IMF). Pakistan Economic Crisis: Pakistan's finance minister Ishaq Dar speaks.(AFP) The finance minister said that he was "hopeful" that Pakistan would pass its next IMF review- ninth for the country. But he "didn't think" it would clear reviews beyond that, he added. Pakistan's gross domestic product (GDP) was projected to grow just 0.29% while the budget said that the fiscal deficit for the following fiscal year was projected at 6.54% of GDP. Read more: Ishaq Dar said that there was "no more room" in the budget to reduce the fiscal deficit target by any further as the country faces a series of economy crisis exacerbated by a stall in bailout funding from the IMF. The Shehbaz Shairf government had no plans to reschedule its debt to Paris Club creditor nations or to seek haircuts on its debt, the finance minister further informed. Pakistan is required to secure firm and credible financing commitments to close the $6 billion gap in order to unlock funding under the IMF review. Pakistan has already gotten commitments of only $4 billion, mainly from Saudi Arabia and the United Arab Emirates, it was earlier re...

An undated image of economist Atif Mian. — Corporate Finance Institute website As embattled Pakistan faces a delay in its attempt to revive its loan programme with the International Monetary Fund (IMF) to avoid a default, economist Atif Mian warns the $350 billion economy is in a “tailspin, going from crisis to catastrophe". The State Bank of Pakistan (SBP), a day earlier, raised its benchmark interest rate to a record 21% as inflation quickened by a fresh record in March months after authorities raised taxes and energy prices and allowed the currency to depreciate to meet IMF conditions and revive a $6.5 billion programme. The economist — in a detailed thread on Pakistan's economy shared on his Twitter handle — warned that these are “very worrying” signs. “In effect, inflation is not only being fuelled by large deficits and money printing,” he said, blaming “foolish policy choices” that have seriously impacted the productive capacity of the economy. The US scholar reiterated that the “bigger worry now is that the entire system is getting unhinged.” “We are witnessing the kind of uncertainty that results in the flight of both capital and humans — pushing further downward pressure on supply,” he wrote on Twitter. “Judiciary, politicians, and generals — in the last couple of years have witnessed a level of chaos, infighting, and jostling for selfish power grabs that have brought the country to this catastrophe,” he said, while referring to the ongoing political and constitut...

Islamabad: Pakistan's economy is currently facing one of its worst crises as the country's foreign exchange reserves have fallen to a critical level of USD 4.5 billion, warned The Federation of Pakistan Chambers of Commerce & Industry's (FPCCI) Businessmen Panel (BMP), according to Pakistan based The Frontier Post newspaper. FPCCI former president and BMP Chairman Mian Anjum Nisar has said that the number is likely to drop further amid debt repayment obligations of more than USD 8 billion in the first quarter of 2023. The country has made repayments of USD 600 million and USD 415 million to two Dubai-based commercial banks. According to reports, Pakistan after the loan repayments will be left with less than 25 days of import cover. Pakistan has been reeling under economic distress due to fast-depleting foreign exchange reserves, weakening rupee, and worsening macroeconomic cues, said the former FPCCI president. This comes as the gap between inter-bank and open-market US dollar rates has widened by over Rs 24, highlighting the difference in how the greenback is being valued in two formal marketplaces in Pakistan, reported The Frontier Post newspaper. Customers are being charged Rs 50-60 to the US dollar for a transaction. According to Mian Anjum Nisar, the current situation in Pakistan has forced commercial banks to be selective in opening LCs even for sectors such as healthcare, as it has been unable to open Letters of Credit (LCs) as per its usual banking cycle. He said t...