What are the biggest threats to the Pakistani economy in the current financial year i.e.2023-24? In this connection, former Finance Minister Hafeez Pasha said that the most significant challenge would be how to preserve foreign reserves.
The PDM led government under the sitting Prime Minister Shahbaz Sharif failed to manage the economy inspite the fact that Finance Minister Ishaq Dar outsourced some important national assets including major airports, seaports and some belongings abroad like Rose Valet Hotel New York to foreign firms for billions of dollars.
He said that currently, Pakistan has about $5.8 billion in reserves, which is insufficient even for one month’s imports. On December 4, we have to pay back $1 billion in Sukuk bonds and in the first week of the new calendar year, the country has to make another payment of nearly $1 billion to two commercial banks of the UAE.”
He also warned the nation by saying that in the next three months, Pakistan has to repay about $18 billion in loans, and throughout the next year, we will need approximately $26 billion more. How the government manages these funds is a significant question mark.”, he added
“Besides that, achieving the IMF target will also be a major challenge in the next year. The government is looking to impose new taxes of Rs. 50 billion in the next fifteen days, but they will not be sufficient. The IMF is talking about imposing taxes of Rs. 800 billion.”
Former Advisor to the Ministry of Finance, Dr. Ashfaq Hassan, told the media that the biggest challenge in the new year will be political instability. As long as no new government is formed for five years, economic stability will not be achieved.
“I had advised the government holding elections after the budget was approved in June. If elections were held at that time, the economic situation would not have deteriorated so much.
He said that continuous increase in government expenditures can become a severe problem in the new fiscal year. More than half of the ministers do not have any portfolios, yet they receive salaries and allowances. To control financial losses, the government should aim to reduce its expenditures by 40 percent.”
On this issue, another economist Dr. Farooq Salim said that the biggest problem for the public in the new year will be inflation.
He said that the energy sector’s losses can prove to be a significant issue. If not addressed, only this sector will be enough to bankrupt Pakistan next year. The circular debt of this sector has already exceeded Rs. 2.5 trillion. Next year, it is necessary to timely resolve issues related to capacity payments with Chinese companies.”
“If the IMF does not give a green signal in the first week of January, commercial banks will face difficulty in repaying a one billion dollar loan. Pakistan can roll over debt at higher interest rates, but it is a challenging task,” said Salim.
Given the current circumstances, it is more appropriate to say that Pakistan will face several threats in the new year, with foreign payments being at the top of the list. The entire year of 2022 was wasted, and now whether 2023 will be wasted or not depends on the country’s political stability.
The PDM led government under the sitting Prime Minister Shahbaz Sharif failed to manage the economy inspite the fact that Finance Minister Ishaq Dar outsourced some important national assets including major airports, seaports and some belongings abroad like Rose Valet Hotel New York to foreign firms for billions of dollars.
He said that currently, Pakistan has about $5.8 billion in reserves, which is insufficient even for one month’s imports. On December 4, we have to pay back $1 billion in Sukuk bonds and in the first week of the new calendar year, the country has to make another payment of nearly $1 billion to two commercial banks of the UAE.”
He also warned the nation by saying that in the next three months, Pakistan has to repay about $18 billion in loans, and throughout the next year, we will need approximately $26 billion more. How the government manages these funds is a significant question mark.”, he added
“Besides that, achieving the IMF target will also be a major challenge in the next year. The government is looking to impose new taxes of Rs. 50 billion in the next fifteen days, but they will not be sufficient. The IMF is talking about imposing taxes of Rs. 800 billion.”
Former Advisor to the Ministry of Finance, Dr. Ashfaq Hassan, told the media that the biggest challenge in the new year will be political instability. As long as no new government is formed for five years, economic stability will not be achieved.
“I had advised the government holding elections after the budget was approved in June. If elections were held at that time, the economic situation would not have deteriorated so much.
He said that continuous increase in government expenditures can become a severe problem in the new fiscal year. More than half of the ministers do not have any portfolios, yet they receive salaries and allowances. To control financial losses, the government should aim to reduce its expenditures by 40 percent.”
On this issue, another economist Dr. Farooq Salim said that the biggest problem for the public in the new year will be inflation.
He said that the energy sector’s losses can prove to be a significant issue. If not addressed, only this sector will be enough to bankrupt Pakistan next year. The circular debt of this sector has already exceeded Rs. 2.5 trillion. Next year, it is necessary to timely resolve issues related to capacity payments with Chinese companies.”
“If the IMF does not give a green signal in the first week of January, commercial banks will face difficulty in repaying a one billion dollar loan. Pakistan can roll over debt at higher interest rates, but it is a challenging task,” said Salim.
Given the current circumstances, it is more appropriate to say that Pakistan will face several threats in the new year, with foreign payments being at the top of the list. The entire year of 2022 was wasted, and now whether 2023 will be wasted or not depends on the country’s political stability.