Economy

Pakistan’s economic crisis deepens amid growing political turmoil

Pakistan’s economic crisis is deepening amid rising political and security uncertainty. Though the country managed to avert a default earlier this month, the challenges on the economic front are multiplying with foreign exchange reserves dipping below $7 billion. The fear of bankruptcy is only growing.

The country will find it tough to manage a debt repayment of over $30 billion this fiscal year.

Pakistan’s benchmark KSE 100 lost more than 1100 points today reflecting a panic-like situation among investors.

According to local newspaper Dawn, Dalal Securities CEO Siddique Dalal said the index fell due to a number of reasons, including fear of the dissolution of Punjab and Khyber Pakhtunkhwa assemblies and rising political confrontations which had damaged investor confidence.

Besides, the delay in the International Monetary Fund’s ninth review for the loan programme that was resumed in August is one of the major factors that has led to the crash.

Pakistan, which had begun the process of eliminating untargeted subsidies under its former Finance Minister Miftah Ismail, is once again back on the course doling out money to various sectors.

Islamabad has reduced petrol and diesel prices by (Pakistani) Rs 10 and Rs 7.5 respectively.

“As general elections approach, the Shehbaz Sharif government may just announce more such programmes..in fact the Imran Khan government came under criticism for boosting the freebies culture but this government has done nothing to alter that bringing Pakistan close to bankruptcy,” an analyst told India Narrative.

As the country is now practically surviving on borrowed money, its fiscal space to invest in developmental sectors has diminished, leading to concerns among citizens.

The spotlight is now on Pakistan’s Finance Minister Ishaq Dar who took charge in September.

“By bringing in Dar as finance minister, the PML-N has made a catastrophic mistake that will blow away what little political capital the party has. Perhaps that is a fair and deserved outcome for a party that has imposed an irrational actor on Pakistan and whose actions are unleashing chaos on Pakistan’s teetering economy,” Dawn in another article said.

Also read: Pakistan’s forex kitty close to nil

Mahua Venkatesh

Mahua Venkatesh specialises in covering economic trends related to India and the world along with developments in South Asia.

Recent Posts

New Zealand Foreign Minister arrives Kathmandu on two days’ visit, ahead Everest Day

New Zealand's Deputy Prime Minister and Foreign Minister Winston Peters has arrived Kathmandu on his…

10 hours ago

Indian, Mongolian armies to hold 17th ‘Nomadic Elephant 2025’ joint exercise in Ulaanbaatar

The Indian Army and the Mongolian Armed Forces will commence the 17th edition of their…

12 hours ago

“Never thought this would happen…”: Pandi Ram Mandavi on receiving Padma Shri for wood craft

Pandi Ram Mandavi, a renowned artist from Bastar, Chhattisgarh, was conferred the Padma Shri award…

12 hours ago

Taiwan slams China’s Cross-Strait summits as ‘United Front Lectures,’ shuns events in Beijing

Taiwan's Mainland Affairs Council (MAC) criticised China on Wednesday for organising two summits for Taiwanese…

14 hours ago

ETGE slams UNWTO official for endorsing China’s tourism drive amid ongoing Uyghur genocide

The East Turkistan Government in Exile (ETGE) vehemently denounces Mr. Francesco Frangialli, the Honorary Secretary-General…

15 hours ago

US lawmakers urge AI Safety Institute to counter China’s growing AI threat

Chairman John Moolenaar and Ranking Member Raja Krishnamoorthi of the House Select Committee on the…

15 hours ago