Index Investing News
Thursday, May 29, 2025
No Result
View All Result
  • Login
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion
No Result
View All Result
Index Investing News
No Result
View All Result

Keeping a close watch on Pakistan’s economy

by Index Investing News
November 14, 2022
in Opinion
Reading Time: 3 mins read
A A
0
Home Opinion
Share on FacebookShare on Twitter


Pakistan’s economy has witnessed a major crisis this year. External debt stood at $130 billion by June, while forex reserves dwindled to $7.59 billion by October. The $6 billion Extended Fund Facility (EFF) for Pakistan, approved by the International Monetary Fund (IMF) in 2019, was halted, allegedly after the Imran Khan government failed to fulfil key norms. Meanwhile, Pakistan’s grey-listing under the Financial Action Task Force (FATF) spelt enormous stress due to related sanctions on trade and borrowing restrictions. This was made worse by the unprecedented floods that swept the country, sparking a humanitarian crisis, with an estimated death toll of 1,725 people and damages worth $30 billion.

However, in the last two months, there have been signs of economic respite. How has Pakistan stayed afloat? Three main reasons can be identified. One, the resumption of the EFF or the ‘bail-out package’ in August 2022. Prime Minister Shehbaz Sharif’s efforts bore fruit when the IMF executive board, after a combined review process, approved the 7th and 8th tranche of $1.17 billion. Additionally, the term period of the EFF was extended up to June 30, 2023 and the total amount raised by $500 million. These funds helped Islamabad avoid default on its foreign debt repayment.

Second, Pakistan’s improved position with the FATF helped Islamabad avert an economic crash. The country’s exit from the grey list meant Pakistan could accrue financial assistance from foreign partners and multilateral institutions. In fact, some analysts say the FATF review positively impacted the IMF decision to revive the EFF. At the same time, four States — China, Saudi Arabia, Qatar and UAE — committed $4 billion assistance to Pakistan and the Asian Development Bank extended a $1.5 billion loan under the Building Resilience with Active Countercyclical Expenditure (BRACE) programme. By November, the forex reserves had risen for the first time in months, to reach $8.9 billion.

Third, substantial help came from international players, a result of the country’s geopolitical importance in Asia. China is the most prominent partner which owns 30% of Pakistan’s overall foreign debt. In June, China provided a $2.5 billion loan to help boost Pakistan’s forex reserves, in addition to another $4.5 billion loan due to be paid this year. This came soon after France signed an agreement with Pakistan, suspending its $107 million loan repayment, under the G-20 Debt Service Suspension Initiative (DSSI). France also committed to organising a donors’ conference. A $30-million humanitarian assistance package provided by the United States (US) in August, through the US Assistance for International Development (USAID), is another example of help coming to Pakistan, despite its failing economic policies at home.

But this doesn’t mean Pakistan’s economy is out of the woods. Despite some positive developments in the last three months, the fundamentals remain weak and there have been no efforts at initiating reform. As much as PM Sharif is cautious about Islamabad relying on more assistance for its economic troubles, Pakistan has little option but to depend on outside help. The country’s economic and political troubles mean that deeper reforms have been jettisoned in favour of short-term, ad hoc measures.

Analysts have begun to suspect donor fatigue from Pakistan’s well-wishers, including China. PM Sharif’s first bilateral visit to China this month was expected to fructify significant pledges of financial assistance and other agreements. However, no new financial assistance was announced to relieve Islamabad of its economic strain. Meanwhile, with Fitch downgrading Pakistan’s long-term issuer default rating (IDR) from B- to CCC+, countries have become less confident about Pakistan’s repayment capacity. The next big deadline is only a few weeks away, with payment of $1 billion due on the five-year Sukuk bond (Sharia compliant), maturing on December 5. Despite being cash-strapped, Pakistan had managed to meet the outstanding amount of $40 million towards the bond in July. But this time, the amount is much larger and many of Pakistan’s friends appear fatigued. Given that Pakistan is entering a protracted period of turmoil, with Army Chief General Qamar Bajwa set to retire at the end of the month and Imran Khan pressing for fresh snap elections, its economy will be a decisive variable for stability in the country.

Shrabana Barua is a geopolitics analyst based in Delhi

The views are personal.

Enjoy unlimited digital access with HT Premium

Subscribe Now to continue reading

freemium



Source link

Tags: closeEconomykeepingPakistansWatch
ShareTweetShareShare
Previous Post

Japan Earthquake: 6.1-magnitude earthquake strikes off central Japan, no tsunami advisory | World News

Next Post

Gender, Race, and the Economy: Social Constructs All

Related Posts

Biden Admin Used Racist Mortgage Coverage Towards White Farmers – FREEDOMBUNKER

Biden Admin Used Racist Mortgage Coverage Towards White Farmers – FREEDOMBUNKER

by Index Investing News
May 29, 2025
0

Authored by Steve Watson through Modernity.information,A whistleblower from the U.S. Division of Agriculture has charged that the Biden administration was...

Nevada faces first actual check for railroads in a long time –
Las Vegas Solar Information

Nevada faces first actual check for railroads in a long time – Las Vegas Solar Information

by Index Investing News
May 29, 2025
0

Thursday, Might 29, 2025 | 2 a.m. If a chemical plant blocked a serious highway in Las Vegas for half-hour,...

The left’s assassination fixation solely additional normalizes political violence

The left’s assassination fixation solely additional normalizes political violence

by Index Investing News
May 29, 2025
0

The left’s assassination obsession is escalating alarmingly and is being tacitly endorsed in all of the unsuitable locations. Some, like...

“I Know You Share My Concern” – FREEDOMBUNKER

“I Know You Share My Concern” – FREEDOMBUNKER

by Index Investing News
May 28, 2025
0

Authored by Ibrahim Garza through The Faculty Repair,A Yale College dean emailed your complete Divinity College a replica of his MSNBC...

French prez Macron claims he fell down stairs once more

French prez Macron claims he fell down stairs once more

by Index Investing News
May 28, 2025
0

Each week, The Put up will convey you our picks of the very best one-liners and tales from satirical website...

Next Post
Gender, Race, and the Economy: Social Constructs All

Gender, Race, and the Economy: Social Constructs All

Stockdale Capital Inks 3 Leases at Phoenix Lab Facility – Commercial Property Executive

Stockdale Capital Inks 3 Leases at Phoenix Lab Facility – Commercial Property Executive

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED

5 lesser-known breast cancer symptoms to watch for

5 lesser-known breast cancer symptoms to watch for

October 16, 2023
Tom Cruise Flies Into Our Home Video Pick of the Week

Tom Cruise Flies Into Our Home Video Pick of the Week

November 11, 2022
Insupportable cruelty of sporting careers

Insupportable cruelty of sporting careers

December 21, 2024
Brazil’s Ongoing Pursuit of Democracy Amidst Bicentennial Celebrations

Brazil’s Ongoing Pursuit of Democracy Amidst Bicentennial Celebrations

September 11, 2022
Trump guarantees to ‘discover and kill’ US enemies — RT World Information

Trump guarantees to ‘discover and kill’ US enemies — RT World Information

February 2, 2025
Safe RBI independence by direct accountability to Parliament

Safe RBI independence by direct accountability to Parliament

March 13, 2025
Seat Belts Save Lives? – Econlib

Seat Belts Save Lives? – Econlib

July 20, 2023
Lupin’s subsidiary recalls over 5,500 skin treatment ointments from US amid manufacturing issue

Lupin’s subsidiary recalls over 5,500 skin treatment ointments from US amid manufacturing issue

February 4, 2023
Index Investing News

Get the latest news and follow the coverage of Investing, World News, Stocks, Market Analysis, Business & Financial News, and more from the top trusted sources.

  • 1717575246.7
  • Browse the latest news about investing and more
  • Contact us
  • Cookie Privacy Policy
  • Disclaimer
  • DMCA
  • Privacy Policy
  • Terms and Conditions
  • xtw18387b488

Copyright © 2022 - Index Investing News.
Index Investing News is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion

Copyright © 2022 - Index Investing News.
Index Investing News is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In