Pakistani Defense Minister: The solution to the problems is not the IMF

Pakistan’s Defense Minister Khavaja Mohammad Asif noted the importance of standing on its own to become a stable country, saying, “The International Monetary Fund (IMF) is not the solution to Pakistan’s problems.”

As reported by the Dawn newspaper, Asif, who made a statement at an event at a private university in the city of Sialkot, said of the country’s economic situation: “You may have heard that Pakistan will go bankrupt or enter in default. . (Bankruptcy) This is over. “We live in a bankrupt country,” he said.

Asif emphasized that it is important to stand on its own to be a stable country, saying, “IMF is not the solution to Pakistan’s problems.” Pointing out that the army, bureaucracy and politicians are responsible for this, Asif attributed the current situation in the country to the lack of recognition of the Constitution and the rule of law in the last 70 years.

EXCHANGE RESERVE 3.19 BILLION DOLLARS

With a nominal gross domestic product of $350 billion, Pakistan has a foreign exchange reserve of $3.19 billion held by the Central Bank. The government had suspended the entry into the country of all imported products, except basic foodstuffs and medicines, until an agreement was reached with the IMF.

Due to this government policy, which tries to keep the dollar in the country, thousands of containers cannot be imported into the country at the Karachi port. Factories that produced in many sectors, especially steel, construction and textiles, reduced or stopped their operations due to the restriction on imports.

AGREEMENT WITH THE IMF

Negotiations continue between Pakistan and the IMF on the release of a loan of 1.17 billion dollars. Pakistan has agreed with the IMF on a $6 billion economic rescue package, which is scheduled to be paid in 39 months in 2019.

In July 2022, it was discussed again and the IMF announced that the total amount of the loan was increased from 6 billion dollars to 7 billion dollars. Under the deal reached, the IMF stated that it would release a $1.17 billion loan to Pakistan if conditions were met.

EXTERNAL DEBT 274 BILLION DOLLARS

In addition to political crises and rising inflation, last year’s devastating flood and power shortage increased pressure on the country’s economy.

Pakistan’s national debt is around $274 billion, which corresponds to around 80 percent of its gross domestic product. This makes the country vulnerable to economic shocks.

The Islamabad government has to pay about $30 billion in foreign debt this fiscal year. (AA)