The International Monetary Fund (IMF) has warned that Pakistan’s foreign currency reserves have fallen below adequate levels and the country stands exposed to serious challenges while urging the government to undertake deep structural reforms.
In a statement issued on Thursday, the IMF said that the foreign currency reserves, held by the State Bank of Pakistan declined last month to below $10 billion, which is “below adequate levels.”
It further added that the reserves would deplete to just $7.4 billon by June 2013, sufficient to meet only two months import bill.
The statement was issued after the IMF Board concluded discussions and evaluation of the 2008 Stand-By Arrangement with Pakistan.
The statement comes at a time when the Finance Minister Dr Abdul Hafeez Shaikh is in Washington with his team to hold talks with the IMF on a future bailout programme.
The Fund said that Pakistan would miss all of its economic targets, inflation will return to double-digits again, economy will grow a mere 3.2% against a target of 4.5%, budget deficit will widen to 6.4% against a target of 4.7% and the unemployment rate will rise to 8.8%.
Published in The Express Tribune, November 30th, 2012.
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Balance of payments crisis predicted for june of next year! Fantastic timing with elections held at the same time. Perhaps they'll be enough drama that the kakis will roll in again for their turn - and the whole cycle can start again...
@p r sharma: ...."including religion." You have hit the nail on the head. That in an essence is the problem with Pakistan.
We have similar problems in Europe... with higher unemployment rate
@Suheil Siddiqi
Because you owe a boatload of money to the IMF which has to be repaid in hard currency and you have already made it clear that your going to need to borrow more.
India, Strangulate Pakistan economically.
Pakistan has to stop relying on furnace oil for power generation. Once a more renewable or cheaper source of energy is used, the oil bill decline, leading to a better balance of payment situation.
Why is IMF informing us?
Energy crisis will keep the export and manufacturing sector stagnant leaving little room for improvement in foreign exchange reserve. ( de listing of Uniliver Pakistan in stock exchange will however make inflow of $300 to 350 million ). Other than export and inward remittance from Pakistani diaspora foreign direct investment are major sources. FDI will come in an environment of political and economic stability and willingness for market reforms. The borrowings from overseas/ international bodies should be the last resort which is temporary in nature. Ultimately own efforts to improve export should be focused upon. improvement of economy should have the highest priority. In the society Food , clothing & housing have priority over all other issues including religion.
It is the revenge of Democracy upon Pakistan.
Jinnah will be extremely proud of us, especially because we work in unpredictable ways and always find new ways to shock ourselves and the world.
Pakistan should really try to bank on the following:
Natural Resources Abundance of Labour Places of mesmerising beauty
I've been told that anything is possible.
Should we take it as trap for a new IMF Programme? Be cautious !!!!!!
What is output of Dr Hafeez sheikh?
Ouch!
Should we call it good news.? I am starting to wonder what is good news for Pakistan on economic front