Pakistan Economic Crisis: Pakistan’s economy has become bad and the treasury of the government is completely empty. Inflation is at its peak in the country and there is a situation of hunger in front of many families. People have to think many times to buy things ranging from food and drink to daily use. The severe shortage of foreign exchange reserves has created difficulties for the government and the general public.
To somehow bring the economy back on track, the Shehbaz Sharif government of Pakistan is requesting financial help from many countries.
Why is Pakistan’s economy in trouble?
One of the major reasons behind the deteriorating economy of Pakistan is its increasing debt. Apart from this, the huge shortage of foreign exchange reserves, political instability are also among the factors responsible for the plight. There was also a huge decrease in the country’s exports. Apart from this, Pakistan’s energy import cost has increased significantly. All the government departments in the country were asked to reduce the consumption of electricity by 30%.
Flood also worsened
In Pakistan, the cash crisis became very serious in 2022, which is intact. Due to this the financial problems of the country increased further. Apart from this, the floods in Pakistan in the summer season last year made the economy worse. According to an estimate, the flood had affected about 33 million people. It is said that due to severe floods in Pakistan, more than 30 billion dollars were lost.
Rising debt and dwindling foreign exchange reserves
At present Pakistan’s PM Shehbaz Sharif is seen begging from many countries including World Bank, UAE, Saudi Arabia. Many countries are fed up with giving them financial help and now they have also started denying it. Rising debt in the wake of high global inflation and rapidly depleting foreign exchange reserves are the biggest challenges for the government. At present, Pakistan’s economic condition is unlikely to improve without an immediate bailout package.
What are the options before Shehbaz Sharif?
Pakistan’s PM Shehbaz Sharif is pinning hopes on the International Monetary Fund. However, financial assistance is not going to be received from the IMF without fulfilling the conditions. IMF has clearly said that it will not give loan to Pakistan without taking tough decisions. On the other hand, if Pakistan fulfills these conditions, then inflation will increase and they will have to face the displeasure of the people.