Pakistan sinks in pool of debt’s as economic growth slumps to 3.9% from 5.2% in 2018

Islamabad, April 4: Reeling under debt’s and facing the ‘macroeconomic challenges’, Pakistan's economic growth is set to slump further to 3.9% in fiscal year 2019 from 5.2% in 2018. The data was initiated by the Asian Development Bank which on Wednesday forecasted that Pakistan's economic growth decelerated in fiscal year 2018 despite revived agriculture.

 

In its flagship economic publication title ‘Asian Economic Development Outlook 2019’, it mentioned that the expansionary fiscal policy markedly widened the budget and current account deficits and drained foreign exchange. Also, Pakistan's Finance Minister Asad Umar claimed that basic debts of the Islamic Republic are so big that it's near bankruptcy.

The Finance Minister said this in a live session on Social Media in Islamabad. “You are going to the IMF with these massive debts in the toe for a bailout. We have had to fill big gaps” the minister was quoted as saying.

Earlier on April 1, Asad Umar had said that negotiations with International Monetary Fund (IMF) have reached its final stage with a settlement of almost all issues related to a bailout package. Pakistan intends to seek for a loan worth $6 to $8 billion from the IMF. However, a final agreement between the two is expected to finalise when the IMF and the World Bank holds a session in April in Washington.

Pakistan's consumer price inflation rose to 9.41 per cent year-on-year, up from 8.21 per cent in February, after citing a data released by the Bureau of Statistics on Monday. Last week, Pakistan's Central Bank lifted its key policy rate by 50 basis points to 10.75 per cent, citing continuing inflationary pressures as well as high fiscal and current account deficits.

Consumer price inflation has jumped sharply over the past year, climbing from under four per cent at the start of 2018, lifted by sharp rises in food, fuel and transport costs that have squeezed household budgets.

The country has also taken a loan from China which amounts to around USD 2Bn so as to provide a major boost to Pakistan’s ailing economy.