WhatsApp Image 2023-02-26 at 9.49.20 AM (1)
WhatsApp Image 2023-02-26 at 9.49.20 AM

“Pakistan under military rule scare”

Kochi: The Islamic republic of Pakistan is in deep financial crisis for a few years now even as rumors of a military rule has terrorised the people.
Former Premier Shahid Khaqan Abbasi has warned of a possible threat of military takeover if the problem continued, media reports quoting “The Dawn”, said.
The country was ruled by military rulers intermittently since independence and the present situation is worse the country has ever endured, the reports said.
The senior leader of the ruling Pakistan Muslim League-Nawaz (PML-N) party said an army takeover would only make things worse.
He has suggested an all party meeting to find a solution to the issue. He has sought parleys with Pakistan Tehreek-e-Insaf chief Imran Khan, PML-N chief Nawaz Sharif and the army to fund a solution to the matter.
Pakistan’s foreign exchange reserves have crashed to 4 Billion Dollars.
None of its friends like China or Saudi Arabia is coming forward to pull it out of the misery.
It is negotiating with the IMF to find a solution.
One of the major reasons for its present problems is xtensive spending on economically non viable projects like Gwader-Kashgar Railway line through long-term debt instruments and external borrowing.
The China–Pakistan Economic Corridor (CPEC) created a Chinese debt of US 64 billion dollars.
Fall of Pakistani Rupee against US Dollar, low ranking by international rating agencies and grey listing of Pakistan in Financial Action Task Force (FATF) have kept foreign investors away.
According to The State Bank of Pakistan, the Foreign Direct Investment (FDI) inflows into Pakistan never exceeded 1 percent of its GDP.
It had fallen into the “Debt trap” for taking fresh loans for repaying old ones.
Heavy dependence on China and Saudi Arabia resulted added to its woes.
Mounting trade deficit driven by zooming imports and falling exports bills is another reason for its crisis. Pakistan’s trade deficit touched an all-time high of 37.7 billion dollars in 2018 due to imports of essential items and exports non-essential items creating a huge export import gap mainly during Covid.
A widening trade deficit and falling investment has led to a sharp fall in the foreign exchange reserves in Pakistan. The foreign exchange reserves fell by 1.97 percent in the second week of November to US$23.550 billion, compared to US$24.025 billion in its previous week.
Inflation in Pakistan touched its highest level in November 2021 due to global rise in crude oil prices making freight charges expensive. Pakistan’s food imports consist of around 16 percent of its gross imports. Poor harvest in the last sowing season is also blamed for high food inflation. Sharp increase in the energy prices during the last few years have created immense inflationary pressure.

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