Former Finance Minister Hafiz Pasha claims that The inflation rate in Pakistan could hit 70 percent if the South Asian economy defaults.
While addressing members of the Pakistan Industrial and Traders Associations Front (PIAF) Ex-Finance Minister Hafiz Pasha said that with the chances of default, Pakistan’s inflation rate could reach 70 percent. Even if the International Monetary Fund (IMF) loan is reinstated, inflation will still reach 35 percent due to the lender’s stringent conditions.
Ex-Finance Minister explained that if the government adopts key reforms agreed upon with the IMF, such as the fuel levy of Rs. 50 per liter, a 40 percent hike in electricity tariffs, a double gas tariff, and a shift to a market-based exchange rate policy, inflation could exceed 35 percent. If the government fails to implement the agreed-upon reforms, he warned that Pakistan will be out of the IMF program which would effectively dry up the country’s capital.
Former Finance Minister Pasha also predicted that Pakistan’s economy will remain in severe economic conditions in 2023. He said Pakistan’s dependence is on costly foreign loans. The country’s debt in the first 65 years was $65 billion, which has now increased to nearly $130 billion over the next seven years after Pakistan increased reliance on high-interest, difficult-to-repay loans, he added.
Remember here one thing, Pakistan is passing through a severe crisis including Economic and Political. The State Bank of Pakistan also issues Alarming Situation for the Country as foreign reserves fell to 4.5 Billion Dollars.
According to sources, the State Bank of Pakistan’s foreign exchange reserves fell to $4.5 billion after the new debt repayments to UAE Banks. Pakistan paid back 600 Million Dollars to the Emirates NBD Bank and 415 Million Dollars to the Dubai Islamic Bank.
After the fresh debt repayments, the forex reserve dropped to 4.5 Billion Dollars, sufficient for only 25 days of import cover.