Pakistan's crumbling economy has been beset by decades of financial mismanagement and poor governance, as citizens are struggling to meet their basic needs. This is Pakistan's 25th loan from the IMF and it has become the lender's fifth-largest debtor.
The $7 billion loan is Pakistan's 25th IMF payout programme since 1958 in exchange for unpopular reforms like increasing taxes. Decades of mismanagement and poor governance brought Pakistan to the brink of default last year as the country faced heavy economic losses.
The IMF has upgraded India's GDP growth forecast to 7% for the fiscal year 2024–25, citing anticipated improvements in rural consumption. Despite maintaining global growth projections at 3.2%, the IMF cautioned about risks including inflation and trade tensions, urging prudent monetary policies.
The IMF observed that Pakistan's debt repayment faces significant risks and remains critically dependent on policy implementation and external financing. Pakistan also faces numerous challenges, like delayed adoption of reforms, high public debt and gross financing needs among others.
The latest tranche is the third and final part of the $3 billion 'stand-by' arrangement between Pakistan and the IMF which is crucial for the country to counter the rising inflation and debt. The cash-strapped country is reeling under high inflation and debt and is heavily reliant on such packages.
In a blistering attack on the government and the military establishment, JUI-F chief Fazlur Rehman said "unseen forces" are orchestrating key decisions. He also extended his support to erstwhile rival PTI's right to protest against the "rigged" elections.
As per the World Economic Outlook report, India continues to be the fastest-growing economy of the world, ahead of China's growth projection of 4.6 per cent during the same period.
Despite Pakistan showing improvement in some areas, the IMF predicted that the country's economic growth remains modest and inflation was above target. The IMF Executive Board had approved the $3 billion Stand-By Arrangement (SBA) for the cash-strapped Pakistan last year.
Jailed former Pakistan PM Imran Khan wrote a letter to the IMF, urging it to give the poll results a thorough consideration before cutting any new cheques for Islamabad. However, the IMF said it looks forward to engaging with the new government and a new economic programme.
The Ministry of Energy officials said they have met the end-December targets related to containing the flow of circular debt below Pakistani Rs 385 billion, timely increase in the electricity prices, and slowing the increase in line losses.
The IMF chief said that some countries have successfully managed inflation and can afford accommodative monetary policies.
The finance ministry said that any adverse global shock or extreme event is expected to uni-directionally impact all the economies in an interconnected and globalised world. A cross-country comparison shows that India has done relatively well.
International Monetary Fund raised India's GDP projection marginally by 0.2 per cent to 6.3 per cent even as it slashed the global growth forecast to 3 per cent. IMF in July had estimated India's GDP forecast at 6.1 per cent for 2023-24. India's growth is projected to be higher than China.
The IMF noted that there are potential risks to prices, primarily from food security concerns. Recent export restrictions in India, the world's largest rice exporter, and uncertain effects of El Nino are contributing to the upward tilt in risks.
The IMF's statement comes after non-basmati white rice exports were outlawed by the Indian government on July 20 in an effort to increase domestic supplies and regulate retail prices during the upcoming festive season.
IMF on Pakistan Budget: The government unveiled a Rs 14.4 trillion budget for 2023-24 in the National Assembly last week as it battled to fend off a looming default due to shrinking foreign reserves.
International Monetary Fund: From 3.8 per cent in 2022, the growth in the dynamic Asia-pacific is projected to hike to 4.6 per cent in 2023.
Issues related to crypto have emerged as a major point of discussion among G20 countries and there is unanimity among member nations about the urgency to regulate this sector.
According to reports, the extra money which will be charged by rich people in Pakistan would be used as funds to subsidise fuel for low-income people.
IMF Chief Kristalina Georgieva, in an interview with German state broadcaster Deutsche Welle, said that Pakistan needs to take strong measures to avoid getting into a dangerous place.
Top News
Latest News
