As the country is reeling under the economic crisis, Pakistan Army chief General Qamar Javed Bajwa has approached the United States to get an early loan disbursement from the International Monetary Fund (IMF). He has sought an early release of $1.2 billion which values over Rs 2.86 lakh crore (Pakistani Rupee) in funds as the country confronts the possibility of debt default as a result of shrinking foreign reserves, Geo TV reported citing Nikkei Asia. Earlier this week, General Bajwa reportedly reached out to US Deputy Secretary of State Wendy Sherman, asking for assistance to bail out Pakistan from the current situation.
According to reports, the Pakistani Army chief appealed to the White House and Treasury Department to urge the IMF to speed up the bailout process to ensure that Islamabad receives the required funds under a renewed loan programme. Earlier, on July 13, Pakistan reached a staff-level agreement with the IMF over the release of the funds to steer the country’s faltering economy. The agreement has also cleared the way for the disbursement of $1.2 billion in funds, which is expected to be released in August.
Pakistani government’s debt increased by 15.3% in FY22
In the first eleven months of the fiscal year FY22, the total debt of the Pakistani government surged by 15.3%. In June 2021, the government of Pakistan had a total debt of Rs 38.704 trillion (Pakistani Rupee), which increased to Rs 44.638 trillion (Pakistani Rupee) in May this year, according to the data revealed by the State Bank of Pakistan (SBP). The surge in the government’s total debt comes at a time when the foreign exchange reserves of the SBP were decreased by $493 million during the week that ended on June 30.
Pakistan’s trade imbalance reaches an all-time high
Additionally, Pakistan’s total foreign exchange holdings also decreased to $15.74 billion and commercial banks now have $5.92 billion in reserves. The State Bank of Pakistan has anticipated the country’s inflation rate is expected to remain between 18-20% in the current fiscal year. Meanwhile, Pakistan’s trade imbalance also increased significantly by 57% to reach an all-time high of USD 48.66 billion in the current fiscal year from USD 30.96 billion the previous year. The trade deficit rose to alarming levels, despite a ban imposed on imports of over 800 non-essential luxury items by the Pakistan government in May, Dawn reported, citing provisional official data.