The country’s international bonds lost nearly a third of their value and Finance Minister Miftah Ismail announced that Pakistan had yet to reach an agreement with the International Monetary Fund (IMF) in June, reported The Express Grandstand.
The minister revealed that at present the government is unable to raise new foreign debt in the global capital market and stressed that controlling inflation is the top priority.
However, an additional $10-15 billion will be needed to finance the current account deficit.
“Controlling inflation will lead to economic growth,” the minister remarked during a webinar on “National Dialogue on the Economy: The Way Forward for Pakistan” hosted by Nutshell Conferences and Corporate on Saturday. Pakistan Group.
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“Pakistan has to repay $21 billion in external debt in the next fiscal year, so entering into the International Monetary Fund (IMF) loan program (worth $6 billion) is a must to organize funding required,” added Ismail.
Highlighting the impending economic crisis in the country, he also pointed out that the country will import 3 million tons of wheat, 4 million tons of cooking oil worth $6 billion and 5 million bales of cotton from the next fiscal year 2022-23 to deal with the country’s economic instability.
The value of Pakistan’s international bonds denominated in US dollars has fallen by around 30% – as the $1 bond was trading at 70 cents when the PML-N-led coalition government came to power in early April. “Now it’s trading at 65 cents,” The Express Tribune said, quoting Ismail.
“This means that we cannot launch Eurobonds on the global market to raise new funds, nor can we approach commercial (global) banks (for the time being),” the minister stressed.
Prime Minister Shehbaz Sharif also visited Saudi Arabia and other friendly countries to secure funding from them.
They are ready to provide loans, but only after Pakistan entered the IMF program, however, the IMF has linked the resumption of its loan program with the removal of subsidies on petroleum products, whereby the government launched the process to cancel the grant with effect from Friday (27 May).
Meanwhile, Pakistani Finance Minister Tarin stressed the need to narrow the gap between import payments and export earnings with a focus on IT exports and blamed the previous government and ousted leader Imran Khan for Pakistan’s financial collapse.
Pakistan’s failure to manage its economy is an unpleasant result of its own actions, as the country incurred $13.033 billion in external debt from multiple funding sources in the first 10 months (July-April 2021-22) , including 2.623 billion USD from foreign commercial banks. for the whole exercise.
Strong domestic demand pressures and rising global commodity prices have led to double-digit inflation in the country, leading to low productivity and a weak investment growth cycle in the country. (ANI)