Economic indicators suggest Pakistan's economic situation would worsen in near future: Report
Dec 18, 2022
Islamabad [Pakistan], December 18 : Pakistan's economy still remains critical and several economic indicators suggest that the situation could get worse. Food shortage, depleting energy, and foreign reserves may create a bigger problem in the upcoming winter.
Pakistan's recent decision not to purchase oil and gas from Russia even after a shortage in the country may not be just to please the United States (US). It may be a decision taken because of the downfall of Pakistan's economy, Islam Khabar reported.
According to Islam Khabar, such a big purchase will need a huge cash outflow as Russia itself is in need of cash itself because of its ongoing war with Ukraine.
Islam Khabar reported quoting a statement of Foreign Minister Bilawal Bhutto Zardari to 'PBS Newshour' on December 14 in which he had said that the country will not be receiving any oil and gas from Russia. This came just a week after Energy Minister of Pakistan Musadik Malik had completed negotiations and signed papers with their Russian counterpart. And resulting Pakistan will now have to turn to Gulf countries that can full fill energy needs of Pakistan.
Islam Khabar reported quoting a report from Dawn that the central bank reserves of Pakistan had dropped from USD 15 billion to just USD 6.7 billion. These dropping foreign incidents will result in the default of foreign loans. And the amount left in the reserves may just be enough to cover one month of imports.
Although the United Nations (UN) and other international organizations rushed in to provide help for the floods that hit Pakistan this year. Although the UN had reported that only one-third of the donation needs of Pakistan were met which will end in January 2023. According to Islam Kahabar UN had asked for USD 816 million but the UN NGOs had only received USD 262 million as international help.
The situation of the industrial sector also remains critical as the large manufacturing sector dropped by 7.75 percent according to the Pakistan Bureau of Statistics (PBS) report which includes textiles and automobiles that contribute a major part to the foreign reserves, according to Islam Khabar.
And Pakistan's agriculture has been in a critical situation for a long time now resulting in poor government policies and lack of investment and low automation. All these finally lead to reducing crop yields, reduced farm incomes, and rural poverty. And Pakistan has been an importer of food and cotton for the large textile industry even before the floods hit Pakistan.
All these factors contribute to a critical economic condition, and the future seems even more difficult according to indicators.
