ISLAMABAD – Pakistan has already taken more than $25 billion in loans fromdifferent sectors. Things don’t seem good for the national economy asPakistan will again look up to International Monetary Fund (IMF) to balancethe crisis.
Analysts say the current interest returns on bonds issued by the governmentwill not be enough to ensure a stable economy. As a result it is projectedthat caretaker government will have to look towards IMF for its rescue.
There were some positives to look at during the start of 2017. KSE-100index hit an all-time high of 53,000 points. However, to the surprise ofmany, economy was hit hard after mid-year. Towards the end, 100-indextouched lowest of the year, closing at 40,500 on 29th December 2017.Rupee’s value also fell against dollar as trade deficit continued toincrease.——————————
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What worries Pakistan most is how the country will pay back the amount itowes to IMF and other lenders. In past Pakistan took loans to pay backloans, it seems that the same path will be followed this year too.
Government issued bonds on a good return rate. However, this isn’t enoughto cover import bills and debt payments that Pakistan owes. Biggest concernfor Pakistan is to somehow decrease the trade deficit which is continouslyincreasing due to CPEC. The 10% increase in exports didn’t even make a dentin continuously increasing imports that country relies on.
In the past, Pakistan went to IMF and took loans and ensured repayments bydevaluing rupee and ensuring privatization of state-owned companies.Pakistan also violated some of the commitments with IMF on previous loans,which will most probably result in increased sanctions by IMF this timearound.
2018 is already here, let’s see if Pakistan economy can finally improveafter years of dependence on foreign loans.