Rising Economic Concerns for Pakistan in the Coming Year

in International Business

Rising Economic Concerns for Pakistan in the Coming Year

A number of news sources in the West have reported that Pakistan would most likely face serious economic problems in the coming year and might not be able to fulfill their obligations towards other countries.

According to the resources, economic instability has led the country to apply for financial assistance from IMF.

Wall Street Journal, quoting Anwar Yassin head of Pakistan’s Central Bank, said that Pakistan is able to pay their foreign debts, but in the next financial year they will be less likely to do so.

According to Mr. Yassin, Pakistan is facing a large trade deficit as a result of which the nation has not been able to boost up its revenues.

Pakistan at the moment is carrying a debt of 4 billion dollars on their shoulder and the officials say that the country may not be able to pay off those debts on time.

Wall Street Journal newspaper has reported that 11 billion dollars fund was paid to Pakistan last year through the IMF, and Pakistan managed to pya back only 8 billion dollars. Pakistan has failed to pay the remaining 3 billion dollars.

IMF and foreign leaders including Hillary Clinton have criticized that Pakistan has failed to compel the country’s richest and its politicians to pay their taxes.

Pakistan receives only 9% tax out of its gross domestic income, which is the lowest level of tax in the world.

Pakistan officials have emphasized that that a large number of economic sectors including the agriculture sector is exempted from tax payments.

Afghanistan and Pakistan are among countries whose economies are largely based on agriculture and livestock. Pakistan, on the other hand, provides lots of assistance to the private sector in the power sector and other goods sector, which puts too much pressure on the government.

In the recent few months, Pakistan’s government instead of raising taxes has run a budget deficit through borrowing from the Central Bank and printing new money. This act has resulted in an inflation of 11%.

Pakistan’s currency also been depreciated. Ninety two rupees is equivalent to 1 dollar .

America has recently been stripping Pakistan of aid and it is likely for terrorist performance to weaken in Pakistan due to the sluggish economy.  



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