Pakistan IMF Deal 2022

Pakistan IMF Deal 2022

Pakistan IMF Deal 2022, Pakistan is facing its worst economic crisis in decades. The dwindling foreign reserves sort of fall in the value of the rupee is fueling soaring inflation political chaos has scared off foreign investors as last year`s devastating floods have added to the many challenges facing the country.

Pakistan IMF Deal 2022, Pakistan has been negotiating with the International Monetary Fund for more than a year so what terms has it agreed to well the country`s revised budget for this year is to raise 1.34 billion dollars in new taxes and the past few days it agreed to hike the main interest rate to 22 percent and keep it high for the coming year to curb soaring inflation.

The fuel and energy subsidies introduced by former prime minister Imran Khan are being ended. The new government says the budget is as people-friendly as possible. Pakistan Is still struggling with its highest inflation rate since 1957 and many in the country say that reduced subsidies coupled with higher taxes won`t bring the relief they need.

Pakistan IMF Deal 2022

The three billion dollars sounds like a lot but given the size of Pakistan`s economy and the state that it`s currently in 3 billion isn`t that much at all. Is it going to be enough to get Pakistan`s economy back on track?

As it is a short-term arrangement it is not possible to get back Pakistan`s economy on track however to address Pakistan`s immediate urgent need not to default it seems to be a huge relief vis-a-vis Pakistan’s needs are so enormous that this short-term arrangement can only provide very limited breathing space and in a few months times will need to go back to the fund for long term arrangement.

Pakistan IMF Deal 2022

Pakistan IMF Deal 2022, Pakistan`s successive governments have been living beyond their means and they have failed to raise taxes to match the expenditure on the external side, they have been continuously borrowing rather than finding ways to increase our exports because we have a huge trade gap. Similarly, there is a huge gap in our current account deficit thus the root source of Pakistan`s financial crisis is its fiscal crisis therefore Pakistan Pakistan has taken very serious measures to come to its fiscal crisis.

The PMLN and PPP simply because they have some money in the coffers and now perhaps have the ability to collect and conduct an election in addition to not defaulting given that during an election season they could enact a range of protectionary measures to protect the consumer against inflationary pressures.

This not only would go against IMF stipulations and go against what the IMF wants Pakistan to do is rationalize our expenditure against our revenues but it will also be detrimental in the long term because to go Garner short-term gains those being you know votes at the polls at a time when the true political party is currently in power are perhaps at their lowest in terms of both performance and popularity thus it would be a nightmare scenario for the country.

Since the new power has come in this IMF deal has been in the works since September last year but the decision made by this government because of you know both indecisions as well as policies and statements are counterproductive as well as not in the interest of the general public and certainly not in the interest of the social contract.

What are the implications of the election for this loan and would Pakistan renege on the deal after the election?

Pakistan IMF Deal 2022 , According to many annalists, the danger is actually before the elections because we still have a few months to go when this government has to relinquish power and then hand over under our constitution to a caretaker government and according to the current scenario there is a real danger that the administration of Prime Minister Shahbaz Sharif begins to resort to election gimmicks. After all, they know that while Shabaz Sharif is taking credit for averting a default they also know that their deal in making wise economic decisions has come at a huge cost to Pakistan`s economy.

IMF a new deal agreement with Pakistan

Pakistan IMF Deal 2022, The main enemy of economic stability is turbulent politics and the inability of our political leaders to agree and even evolve some economic vision for Pakistan. No country in the world has made economic progress without having a leadership in place that is committed to long-term economic measures and unfortunately, the poverty of political leadership in Pakistan has contributed enormously to the economic mess.

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