An International Monetary Fund (IMF) report has warned of the prospects of lawlessness and rising public anger in the wake of ever-increasing inflation, which has reached a 47-year-high in August at over 27 per cent in Pakistan. The executive summary of the seventh and eighth reviews, released under the Extended Fund Facility, after the approval of the disbursement of $1.1 billion under a bailout package, reads that “high food and fuel prices could prompt social protest and instability.” The report came at a time when the consumer price index (CPI) rose to 27.3 per cent in August. The report is enough to open the eyes of the rulers, opposition and the general public, instead of pushing the panic button, and must reinforce the government to undertake reforms, restricting loss-making ventures “especially those related to the financial sector (resolving undercapitalized banks and winding down SBPs involvement in the refinancing schemes), could hamper financial sector stability and reduce the effectiveness of the monetary policy. Finally, climate change risks are mounting, including a tendency for more frequent climate-related disasters (reads the report of the IMF)”. The IMF report gives important information regarding the current situation and future prospects of the Pakistani economy. A good part of the report condemns the previous government of the PTI for deviating from the terms of the programme by giving a relief package in February 2022. This resulted in an increase in budget deficit. The new government delayed its decisions, but later on, took concrete steps to restore the loan programme but the effects of the difficult global economic conditions will remain on the Pakistani economy.
It is hoped after strict fiscal policies, inflation and deficit will decrease by next year, but with the Ukraine crisis ongoing and the increase in the prices of commodities and energy fuel at the global level, inflation will increase in Pakistan this year, which may trigger public protests. The fact is that our economic problems are not going to end soon and we will have to struggle patiently to improve the situation. The destruction of millions of households and agricultural crops cultivated on millions of acres across the country will cause an immense increase in economic difficulties. This situation can be faced only with national unity and solidarity. For the sake of the country’s security, all political forces and state institutions should agree on the agenda of economic recovery, and the government’s efforts to restore the IMF agreement should be acknowledged.
