The government is taking a number of steps to support the economy, all of which are anticipated to have a positive impact. However, the political unrest has caused the ruling party to focus on their own security, and the forces working to overthrow them are now openly engaged. With the country’s economic woes of heavy debts, declining investment rates, increasing trade deficits, inflation, unemployment, a decline in industrial production, and other such issues, the news that Pakistan and the International Monetary Fund (IMF) have failed to agree on a broader agreement on a revised macroeconomic framework for the current fiscal year will be cause for further concern. As a result, the conclusion of the 9th review of Pakistan’s IMF loan programme and the distribution of the one billion dollar tranche for the next year, 2023, may be postponed.
Although the participants are remaining tight-lipped about the situation and refusing to reveal anything, insiders say there has been no progress in the weeklong virtual talks, and the two sides have yet to strike an agreement. There are differences in Pakistan’s revised model framework, according to the IMF, and it will be impossible to execute at the policy level until these differences are resolved and a consensus is established, and the ongoing review will not be completed until these differences are resolved and a consensus is established. Pakistan will now have to work even harder to make this review a success, and this work will have to continue during the New Year and Christmas holidays, which begin on December 20.
Following that, the IMF Executive Board will meet in January 2023 to approve the next tranche for Pakistan, but both parties must achieve an agreement within the following 10 days and overcome the challenges. The IMF has also urged Pakistan to cut spending ahead of the ninth review, which will be tough given this year’s flood devastation and the rehabilitation of millions of displaced people. Although international attempts are being made to assist Pakistan, the secretary-general of the United Nations has described these as “peanuts.”
The better option for Pakistan in this circumstance is to develop its own resources. Political unrest, rising interest rates, a decline in the stock market, a depreciation of the rupee, and challenging business circumstances are other indicators that the nation is experiencing. The international organization’s team is scheduled to visit Islamabad shortly in this respect, but the factors attempting to hurt Pakistan at home and abroad seize every chance to broadcast unfavorable information about it, particularly the political aspects of the situation. It will therefore be difficult to persuade the IMF.
The economy is currently suffering the most, and the average person is unsure of how to set up a dual source of income. The nation’s debt load is rising, which is making the situation worse. The political and economic crisis that the nation is currently experiencing has never occurred before, so who will persuade the political establishment that they should be concerned for the nation? To combat this, the whole country will need to unite.