Updated January 19th, 2024 at 17:58 IST

Bankrupt, Cash Strapped Pakistan Searches for Allies As Economic Woes Worsen in 2024

Pakistan’s Caretaker Finance Minister Dr Shamshad Akhtar announced that Islamabad was forced to stall the conventional bonds for 2024.

Reported by: Digital Desk
Pakistan's caretaker Prime Minister Anwar-ul-Haq Kakar. | Image:AP
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Cash Strapped Pakistan is scrambling to search for allies amid the economic fallout having able to materialise only $5.97 billion in foreign loans for the year 2023-2024. Neighbouring Islamabad has been struggling with funding in its reserves, worsened with the adverse international environment mired with conflicts as well as country’s poor credit rating.

On January 18, Pakistan’s Caretaker Finance Minister Dr Shamshad Akhtar announced that Islamabad was forced to stall the conventional bonds for 2024, despite that $1billion bond would mature in April. To escalate the financial woes, Pakistan will have to repay an estimated $4.5 billion in the foreign commercial loans.

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Pakistan’s economy reeling with ‘worst ever crisis ever’

In the year 2024, Pakistan’s economy is reeling with the worst ever crisis, that is combined with the shocks of post-COVID-19 recovery, 2022 catastrophic floods, and just lately the adverse global conditions due to regional de-stabilization. Pakistan is struggling with sluggish growth, spiking poverty rates, and the human development outcomes are staggering as low as witnessed in some of the poorest nations.

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While desperately scrambling for foreign investments, Pakistan is now eyeing for allies primarily from the Gulf region to bolster its tattered economy. The government in Pakistan is hoping that two of what it describes as the brotherly nations, Saudi Arabia and United Arab Emirates (UAE) the world’s biggest oil producers and exporters, might implement deals in its energy and mining sectors.

With a population of 240 million, the Southeast Asian nation is looking for allies to rescue it out of the economic turmoil that has exacerbated over the concluding months, last year. Earlier this year, almost the entire Pakistan was rendered without power, plunged into darkness due to the energy saving strategy that backfired, as well as skyrocketing inflation, and protests from the civilians who refused to pay the electricity bills that were calculated twice or thrice the actual amount to replenish the state revenue. Islamabad was also priced out on the LNG procurement market, that led to backlog of the cargoes. With no allies in close sight, Pakistan received some concession on its economic misery after the International Monetary Fund (IMF) deal that approved a $3 billion Stand-By Arrangement (SBA) to back its economic reform program in order to stabilise its economy.

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Published January 19th, 2024 at 17:58 IST