Islamabad: Pakistan is in economic turmoil as its foreign debts are rising while foreign exchange reserves are decreasing.
The situation raises concern over Pakistan’s economic challenges getting deeper, reported local media.
Pakistan’s external debt servicing rose to USD 10.886 billion in the first three quarters of 2021-22 compared to USD 13.38 billion in the entire FY21.
The situation will create a serious problem for Pakistan as its foreign exchange reserves are fast depleting amid rising external debt servicing, reported Dawn.
The external debt servicing was just USD 1.653 billion in 1QFY22 against USD 3.51 billion in the first quarter of 2020-21.
However, the debt servicing jumped to USD 4.357 billion in 2QFY22 and further to USD 4.875 billion in 3QFY22, reported Dawn.
Pakistan has been facing a serious threat on the external front as the State Bank of Pakistan’s foreign exchange reserves fell to single digits despite a USD 2.3 billion inflow from China late last month.
The increasing size of the external debt servicing in each quarter indicates the government has been borrowing dollars at higher commercial rates to meet its foreign debt repayment obligations, reported Dawn.
The economic slowdown is taking a toll on Pakistan’s job market as some sectors reported layoffs.
“Textile and technology sectors have reported job cuts amid the economic slowdown,” Fahad Rauf, Head of Research at Ismail Iqbal Securities, said last week, reported The Express Tribune.
“Some Pakistani exporters have reported cancellation of export orders (by international buyers) in the backdrop of global recession fears.”
The layoffs will result in newcomers finding jobs becoming a tough task in the short to medium term, reported The Express Tribune.
The employment rates stand below the required levels due to slower economic growth compared to the 6-7 per cent economic expansion required to accommodate all new job-seekers in the country.
The UN had suggested 17 targets for perpetual development which means equal opportunities for every human to make one’s life better, reported local media.
Unfortunately, at the international level, no serious measures were taken in this regard. As far as Pakistan is concerned, where poverty is increasing every day such steps are extremely important, reported local media.
It was suggested that Pakistan should save wastage of natural resources so that future generations could also benefit from it.
Similarly moving toward renewable energy is also important to reduce the adverse environmental effects due to pollution.
The government should take immediate actions in this regard to stop increasing crises in the country, reported local media.