AGL 5.78 Increased By ▲ 0.03 (0.52%)
ANL 8.88 Increased By ▲ 0.03 (0.34%)
AVN 78.93 Decreased By ▼ -0.57 (-0.72%)
BOP 5.29 Increased By ▲ 0.12 (2.32%)
CNERGY 4.70 Increased By ▲ 0.01 (0.21%)
EFERT 81.57 Increased By ▲ 0.47 (0.58%)
EPCL 50.96 Decreased By ▼ -0.03 (-0.06%)
FCCL 13.35 Decreased By ▼ -0.14 (-1.04%)
FFL 5.74 Decreased By ▼ -0.07 (-1.2%)
FLYNG 7.15 Decreased By ▼ -0.06 (-0.83%)
FNEL 4.82 Increased By ▲ 0.02 (0.42%)
GGGL 8.87 Increased By ▲ 0.17 (1.95%)
GGL 15.90 Increased By ▲ 0.15 (0.95%)
HUMNL 5.79 Decreased By ▼ -0.06 (-1.03%)
KEL 2.68 Increased By ▲ 0.10 (3.88%)
LOTCHEM 29.06 Decreased By ▼ -0.44 (-1.49%)
MLCF 24.99 Decreased By ▼ -0.31 (-1.23%)
OGDC 72.46 Increased By ▲ 0.01 (0.01%)
PAEL 15.35 Decreased By ▼ -0.05 (-0.32%)
PIBTL 5.06 Decreased By ▼ -0.09 (-1.75%)
PRL 16.31 Increased By ▲ 0.06 (0.37%)
SILK 1.08 Increased By ▲ 0.01 (0.93%)
TELE 9.39 Increased By ▲ 0.09 (0.97%)
TPL 7.34 Decreased By ▼ -0.01 (-0.14%)
TPLP 18.90 Decreased By ▼ -0.26 (-1.36%)
TREET 21.95 Increased By ▲ 0.10 (0.46%)
TRG 140.87 Decreased By ▼ -1.93 (-1.35%)
UNITY 17.01 Decreased By ▼ -0.19 (-1.1%)
WAVES 9.90 Decreased By ▼ -0.13 (-1.3%)
WTL 1.41 Increased By ▲ 0.03 (2.17%)
BR100 4,255 Increased By 7.1 (0.17%)
BR30 15,733 Decreased By -28.8 (-0.18%)
KSE100 42,394 Increased By 44.9 (0.11%)
KSE30 15,664 Increased By 31.9 (0.2%)
Follow us

ISLAMABAD: Pakistan’s economy faces serious challenges due to fast decreasing foreign exchange reserves and political instability. Talking to Business Recorder former Finance Minister Dr Hafeez Pasha stated that both domestic and international factors are contributing to the ongoing economic impasse.

Foreign exchange reserves are decreasing by $300-400 million on weekly basis due to an increase in imports and may drop below $8 billion in the next couple of months, which would be very alarming if the current trend of imports continued Pasha added.

He said that oil prices are hovering between $104-105 per barrel in the global market and no one can definitively predict which direction prices would move next. In such a situation, he said, the International Monetary Fund (IMF) programme would be the only hope for the country as the programme and not the money disbursed under the programme is important for Pakistan.

Pasha suggested the need to drastically reduce imports, increase revenue collection and sustain the 26 per cent growth achieved in exports during the last month.

Forex reserves dip by $369m

However, he expressed concerns about the increase in trade deficit during the last month due to the higher price of oil and commodities in the international market. This would result in more inflation in the coming months not only because of high commodity and oil prices but also because of the impact of the depreciation of the rupee against the dollar as well as an increase in electricity and gas prices, he added.

Former Finance Minister stated that according to his estimate, inflation would increase to 25-30 percent in the next two to three months and the poor would be facing the brunt of inflation, as well as, in terms of fewer employment opportunities due to a projected slowdown in economic activity. He added that 15 percent increase in the discount rate and cost of electricity/ gas would have a negative impact on the output.

Pasha said there has been an increase of 56 percent in prices during the last four years whereas the earnings of low-income group are estimated to increase barely by 20 to 22 percent.

Agreement with the IMF

He said, unfortunately, the government strategy in the budget remains focused on increasing tax rates instead of taking measures to expand the tax base. Pasha said that the current situation requires political stability in the country to steer the economy out of the current morass. He said that political instability has also been contributing to the economic situation and no one is ready to invest in the country.

He said that the current economic situation requires all the stakeholders to sit together and take decisions to save the economy.

However, former Adviser Finance Ministry Dr. Ashfaque Hassan Khan said that the economy is sinking and nobody is interested in salvaging it. He said that the state of the economy is not in good shape with a rupee free-fall taking the country’s economy towards greater vulnerability.

Copyright Business Recorder, 2022


Comments are closed.

Hussain Naqvi Jul 24, 2022 04:32pm
AslamoAlikum: Thanks to BR for publishing this interview of Dr. Ashfaque Hassan Khan. Allah swt bless him. He is a true patriot. He should be the adviser finance to COAS. Regards
thumb_up Recommended (0)

‘Falling forex reserves, growing political instability detrimental to economy’

Disasters cost $268bn in 2022: Swiss Re

PM for implementation of agreement reached at COP27

Flood relief activities: ‘Pakistan has received $738.53m foreign aid so far’

Jul-Nov trade deficit shrinks 30.14pc to $14.406bn YoY

Deemed income on capital assets: Taxpayers required to file new form separately

Global factory activity shrank last month

LPG price up by Rs11.7/kg for Dec

PRL barred from shutting down this month

No curbs on oil, LNG and POL products’ LCs: SBP

HSD, SKO & LDO: PL increased to generate Rs36.199bn