In recent months, Pakistan has been experiencing mounting economic problems as the country struggles to cope with mounting debt, inflated energy import costs, dwindling foreign exchange reserves, global inflation, political instability, and a sustained decline in GDP growth. The current situation is a race against time for the government to prevent a complete economic collapse that could severely impact millions of citizens in the country.
Increasing sugar, flour, and ghee prices in Pakistan
Recently, the Pakistani government auctioned property at the US embassy because of the crisis. Additionally, Pakistan’s Lahore faces a massive shortage of flour, where prices have skyrocketed, and most shops need more stock. According to ARY News, the price of a 15 kg flour bag went up by Rs 300 in two weeks due to the shortage. According to The Dawn, the government raised sugar and ghee prices by 25 percent to 62 percent.
Currently consuming too much power.
To cut costs and decrease dependence on imported oil, the Pakistan Government has taken several measures, including shutting down markets and wedding halls early and requesting government employees to work at home daily. The country is going through a critical period. As part of the plan, all government offices and buildings will reduce their energy use, and a policy for working from home will be implemented within 10 days.
IMF bailout tranche delayed as Pakistan’s forex reserves dwindle
The central bank reported that Pakistan’s liquid foreign exchange reserves fell to $11.7 billion in December – half of what they were at the beginning of the year. Additionally, the country’s finances have been affected by differences with the International Monetary Fund (IMF) over the review process, which delayed the release of a $1.1 billion bailout tranche. In 2019, Pakistan received a $6 billion bailout package from the IMF and $3.9 billion until August. A pending IMF review delayed the next tranche, expected in September.
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