Last Updated on 08/08/2024 by wccexam Desk
Pakistan, which is facing the biggest economic crisis in its history, got help from the International Monetary Fund (IMF) and many friendly countries, but the condition of the country is still bad. Pakistan has an external debt of 130 billion dollars, while the people of the country are not getting relief from inflation. Meanwhile, Pakistan’s central bank State Bank of Pakistan (SBP) has issued a big warning. The bank has said that a big increase in the inflation rate can be seen.
‘Controlling inflation is a big challenge…’
State Bank of Pakistan (SBP) Governor Jamil Ahmed on Wednesday warned that budgetary measures are expected to increase Pakistan’s inflation rate. According to a report by Dawn, controlling inflation on the domestic front is the biggest challenge. The State Bank Governor estimated that inflation will be 11.5 percent in FY25, but it could reach 13.5 percent due to budgetary measures and energy prices.
He also warned that rising wheat prices in the coming winter could further increase this inflation. According to Ahmed, at present the prices of crude oil are falling in the global market, but the conflict situation in the Middle East may prove to be an increase in this, the effect of which can also be seen on Pakistan.
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Country’s debt is $26 billion for FY25
According to the report, SBP Governor Jamil Ahmed warned about inflation while giving information about the performance of the country’s foreign and domestic sector for the current fiscal year before the National Assembly’s Standing Committee on Finance and Revenue, headed by MNA Naveed Qamar. He said that inflation is expected to rise, but management can remain smooth in the current financial year due to the advancement of loans given by friendly countries.
Presenting the figures, he said that Pakistan’s outstanding debt payment for FY25 is $26.2 billion. However, China, Saudi Arabia and UAE have agreed to extend the loan of $12.3 billion by one year. Jameel Ahmed said that this rollover is like a sigh of relief for the government in FY25.
Pakistan is under the burden of heavy debt
The decision by China, Saudi Arabia and UAE to extend Pakistan’s debt for a year comes at a time when Pakistan is hoping that the International Monetary Fund (IMF) may approve a $7 billion bailout package later this month. SBP Governor Jamil Ahmed said that the central bank has already repaid $1.5 billion in debt last month, while $8.5 billion is yet to be repaid by the end of the current fiscal year. He said that the country’s external debt has reached $130 billion.
‘GDP growth has been limited for a decade…’
SBP Governor Jamil Ahmed said that continuous measures have been implemented to control the inflation rate in Pakistan and it is expected that it can be brought between 5 to 7 percent. Along with this, referring to Pakistan GDP Growth, he admitted that in the last decade, GDP growth has been limited to 3.5 percent, which is modest compared to the country’s population growth.
Jameel Ahmed stressed the need to increase domestic exports from 10 percent to 15 percent. Earlier, the Policy Research and Advisory Council (PRAC) had urged the State Bank of Pakistan to reduce the policy rate from 19.5 percent to 17.5 percent.
Source (PTI) (NDTV) (HINDUSTANTIMES)