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HomeEconomyPak economy continues to remain in shambles due to structural imbalances

Pak economy continues to remain in shambles due to structural imbalances



Annie |
Has been updated:
Nov 28, 2022 05:26 IST

Islamabad [Pakistan]Nov 28 (ANI): Pakistan’s economy continues to deteriorate due to structural imbalances, and several decisions on economic policies such as taxes, subsidies, etc. in the South Asian country are being addressed over time. As Dr. Sakariya Kareem said while writing for Asian Lite:
Islamabad’s foreign exchange crisis is exacerbating as its foreign exchange reserves deplete from over USD 20 billion in August 2021 to a very low level of USD 8 billion, undermining the country’s international payments capacity.
Foreign Direct Investment (FDI) fell by 52% in the first four months of the current financial year 23, demonstrating the dire economic condition of the country. A sustained decline in remittances has added to the plight of Pakistan’s currency.
Remittances for July-October 2022 totaled USD 9.9 billion, down 8.6% from USD 10.827 billion in the same period last year. If current trends continue, overall remittances for the fiscal year ending June 23 are expected to fall to nearly US$30 billion, down from US$31 billion for fiscal year 2022, Asian Lite reported.
Meanwhile, Pakistan’s textile exports fell to their lowest level in 17 months since May 2021. This was due to a global slowdown in demand for textiles and clothing in Europe, the UK and the US as a result of higher price inflation, rising energy. spending, soaring credit costs in the West.
Park’s export earnings reached a historic high of US$19.35 billion last year. However, the outlook for exports this year remains bleak due to the foreign exchange reserve crisis. According to Asian Lite, Pakistan’s textile exports could fall by his US$3 billion.

Although overall pakistan trade deficit In the first four months of fiscal year 2023, the deficit narrowed to US$10.8 billion, compared to a deficit of US$13.75 billion in the same period last year. signs of economic slowdown.
Pakistan’s Finance Minister Ishak Dar has repeatedly guaranteed sukuk payments as the country’s economy struggles to avoid default by borrowing more from markets, donors, commercial banks and friendly countries. international markets are unwilling to rely on such guarantees.
Dawn reported that talks between the IMF and the government of Pakistan, which were scheduled to begin in early November, have been postponed until the third week of November. Negotiations will resume after Pakistan addresses its commitment to adjust sales taxes on petroleum products and takes other necessary steps under the reinstated loan agreement earlier this year.
Official sources who spoke to Dawn said talks between the IMF and Pakistan had been rescheduled following a World Bank report on Pakistan’s flood damage released in October. Pakistan said she will pay US$1 billion on December 5 for maturity of a five-year sukuk, or Islamic bond.
Pakistan’s Finance Minister Ishak Dar has repeatedly guaranteed sukuk payments as the country’s economy struggles to avoid default by borrowing more from markets, donors, commercial banks and friendly countries. international markets are unwilling to rely on such guarantees.
The financial sector says the fund is calling for new taxes to boost liquidity and avoid widening the budget deficit. The government needs at least 800 billion rupees, which could be met by a new tax that could prove difficult for the government amid economic conditions and political turmoil, according to reports.
Pakistan has been in political turmoil since Imran Khan was sacked in a confidence vote in April. His Tehreek-e-Insaf chief of Pakistan, Imran Khan, has accused the US of planning his deportation. (Ani)

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