There has been hue and cry over the collapse of Pakistan’s economy. Poor Pakistan is not getting even two meals a day to eat. There is a fierce battle for flour, pulses, rice and roti. Inflation has put Pakistan on the brink of bankruptcy. This condition of Pakistan has not happened just like that.
Pakistan Economic Crisis: There has been an outcry due to the collapse of Pakistan’s economy. Poor Pakistan is not getting even two meals a day to eat. There is a fierce battle for flour, pulses, rice and roti. Inflation has put Pakistan on the brink of bankruptcy. This condition of Pakistan has not happened just like that. Actually, most of the money to Pakistan used to come from Terror Funding.
But the juggling between the Prime Minister of India, Narendra Modi and the then President of America, Donald Trump, hit Pakistan’s terror funding in such a way that Shahbaz Sharif is still bearing its brunt. Earlier Pakistan’s economy was running due to terror funding. But after being in gray list for 4 consecutive years, Pakistan could not raise Terror Fund. This ruined his economy.
Due to India’s strong opposition against terrorism, former President Trump also tightened the noose on Pakistan. Trump had clearly said that he is not satisfied with Pakistan’s action against terrorism. That’s why America had also stopped the then financial help given to Pakistan. After this, the International Monitoring Agency Financial Action Task Force (FATF) put Pakistan in the gray list in June 2018. Due to this, Pakistan had put an end to the terror funding from all the countries of the world.
FATF started monitoring Terror Funding. Let us tell you that the World Bank and other big institutions including the International Monetary Fund (IMF) stop giving funds and loans to the countries living in the gray list of FATF. Same happened with Pakistan. Due to this, the economy of Pakistan kept going in the trough. By October 2022, after being in the gray list for almost 4 years, Pakistan came out of the grace of US President Joe Biden, but by then its economy had cracked.
Pakistan on the verge of bankruptcy
Former President Trump’s “arrow” has proved to be very effective on terror funding to Pakistan. That’s why Pakistan has now become completely pauper. Prime Minister Shehbaz Sharif has been forced to beg from different countries with the bowl. There the inflation rate has reached 25 percent. The prices of food items are on fire. Meanwhile, the IMF has refused to give loan to Pakistan, because its ability to repay the loan is no more.
Although PM Shehbaz Sharif had made many requests to the IMF, but the IMF pulled the plug. Due to this, the condition of Pakistan has become bad. Other institutions including the World Bank have also pulled back from giving loans to Pakistan. Pakistan’s rating is in a bad phase. The condition is that even his friend China is not ready to give him a penny now.
Loan to be returned more than foreign exchange reserves in 3 months
Pakistan’s foreign exchange reserves are just $5 billion. Whereas in the next 3 months, he has to repay the loan of more than $ 8.5 billion. Recently, Saudi Arabia and America have given more than 2 billion dollars to Pakistan, but even this does not seem possible to save Pakistan from bankruptcy.
Banks have refused to give letters of credit to Pakistani importers. Due to this, importers are not able to get medicines and other raw materials apart from food items. Containers have been held up at Karachi port awaiting letter of credit. Due to this, Pakistanis are not even able to get the things of daily need. People are protesting against the Shehbaz Sharif government on the road.
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