Pakistan: Pakistan has been facing a huge financial crisis which triggered fears of getting bankrupt across the nation. More than 8,500 containers are still stuck up at the seaports of the country, which alarmed the situation.
With the financial crisis and the spike in the prices of food, Pakistan’s coffers are also running dry. There is a huge shortage of dollars which makes unable for importers to clear more than 8,531 containers, and the shipping companies are taking back their hands into Pakistan’s operations over the country’s failure to make timely payments.
The central bank of Pakistan has a paltry USD 4.4 billion in reserves, which could import things for three weeks. However, the need to clear the containers and pending requests for opening more letters of credit stand in the range of USD 1.5 billion to USD 2 billion.
The government has stopped more than USD 2 billion in payments of dividends which will hurt future investment prospects. The inflation rate of the country stood at 25 percent and the breakdown of the supply chain may cause hyperinflation in a country that might be in for more imported inflation due to steep currency devaluation.
The country was also expected the loan from the International Monetary Fund (IMF) and after the revival, Pakistan’s reserves slightly bounced back to USD 8.8 billion before again depleting to USD 7.8 billion when Miftah Ismail left the command of the Finance Ministry.
The economic strain can be seen in the imports. The central bank a few months ago started stopping the majority of the imports through administrative controls and arm-twisting tactics.
This week, the governor of SBP said that they have been solving between 5,000 and 6,000 cases per month. They have resolved 33,000 since May 2022. But many businesses that are essential for the continuation of daily economic and social life have been declared non-essential to lessen the import bill.