Multiple Whammy: Amid relentless political turmoil, Pakistan’s economy coming to a grinding halt
Virendra Pandit
New Delhi: Amid continued political uncertainty, the Imran Khan factor, terror attacks on its Afghan borders, threats of a civil war or a military coup, and a bankrupt financial system, an already shattered economy in Pakistan is coming to a near-grinding halt by next month, which may finally force it to announce a default.
According to the media reports on Thursday, Pakistan’s National Accounts Committee (NAC) has drastically slashed provisional growth in Gross Domestic Product (GDP) from 2 percent to just 0.29 percent by the end of its current financial year (2022-23), ending June 30, 2023.
This latest GDP growth forecast is lower than even the World Bank’s estimate of 0.4 percent, while the IMF said in April that the growth would be 0.5 percent.
The continued slowdown in the agricultural and industrial sectors across Pakistan curbed its growth.
Facing acute shortages, the debt-burdened South Asian country posted the highest-ever inflation at 36.4 percent in April 2023. Its currency (Pakistani Rupee) has depreciated to a historic low of PKR 286 to a US dollar, the media reported on Thursday.
Gripped by economic turmoil and suffering a balance of payments crisis, Pakistan is, since February, trying to reach an agreement with the International Monetary Fund (IMF) to disburse the stalled final USD 1.1 billion from a USD 6.5 billion bailout agreed in 2019, during the Imran Khan regime.
Pakistan’s central bank, the State Bank of Pakistan, said GDP growth may remain significantly lower for the financial year 2022-23 than the previous year when growth was revised up to 5.77 percent.
