IMF should help Pakistan to beat the worst economic crisis

February 07, 2023 (MLN): The International Monetary Fund (IMF) should work with Pakistan’s government to guard the economically disadvantaged by broadening social protection systems, and minimizing reform measures that might harm the most vulnerable people, as per Human Rights Watch.

At present, the country is facing the worst issues such as rising inflation, poverty, poor governance, shortage of reserves, and increased unemployment.

On February 01, 2023, the government began talks with IMF to discuss a plan to rescue the economy, including the revival of the ninth tranche worth $1.1 billion in loans from a $6.5 billion bailout.

“Millions of Pakistanis have been pushed into poverty and denied their fundamental social and economic rights,” said Patricia Gossman, associate Asia director at Human Rights Watch.

She further added, the IMF and the Pakistani government have a responsibility to address this crisis in a way that prioritizes and protects low-income people.”

As per SBP data, the SBP foreign exchange reserves are its lowest clocked in at $3.09 bn down by 16%, an amount covering less than three weeks of imports.

On the inflation side, Pakistan is facing its highest inflation levels since 1975, with the cost of perishable food items rising more than 60 percent in January.

Recently, on IMF demand Pakistan has increased petrol and diesel prices by Rs35 and removed the cap on the dollar as it was the primary condition of IMF and the dollar should be market driven.

Pakistan’s negotiations with the IMF, which continue through February 9, are meant to clear the IMF’s ninth review of its Extended Fund Facility, aimed at helping countries with balance-of-payments crises, it added.

The IMF bailout installment would ease the crippling shortage of foreign exchange and unlock access to other funding, including from multilateral and bilateral donors.

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