Washington/Islamabad: Pakistan who already has a tarnished image because of an unstable government, policy to aid the terrorists, increased violence and human rights violation seems to be in for another jolt. The International Monitory Fund (IMF) has expressed concerns over the Pakistani economy and given indications that the economy is heading towards bankruptcy. It has been revealed that Pakistan has borrowed a staggering $500 million from China to try and recover the economy. In view of this, the IMF’s warning gains importance.
The IMF warning was published by ‘Dawn’, the leading Pakistan daily. The fiscal deficit has reached Rs.505 billion which is 5.05% of the ‘GDP’. At the same time, the ‘Current Account Deficit’ is pegged at around 5% and the figure will cross $16 billion. Whereas the GDP growth rate may remain a mere 5%.
Pakistan’s foreign exchange reserves have drastically reduced and it may slip down to $12 billion. The IMF has warned in its report that with these reserves, Pakistan will be able to import essential goods till up to about 10 weeks. There are positive signs to some extent because of the ‘China-Pakistan Economic Corridor’ (CPEC), growth in agriculture and the increasing demand. But the downward trend in the economy will continue due to the fiscal deficit and the other negative factors, indicated the IMF.
The total debt and other liabilities of Pakistan has reached $89 billion. IMF has expressed fears that this might rise further in the near future. The ratio of the debt as opposed to the GDP also may reach to 70%. The IMF has recommended developing new avenues for increasing revenues and cutting down the expenditure for improvement in the economy.
The United States decided to stop financial aid to Pakistan only two months ago. Subsequently, the international community has consented to include Pakistan in the ‘FATF’ watch list which includes countries aiding terrorism. The local as well as the international analysts had warned of reduction in the flow of foreign investors to Pakistan. It has been warned that the stoppage of loans from the World Bank and the other international financial agencies, will cause further deterioration of the Pakistan economy, already in doldrums and this is further confirmed by the IMF warning.