Acting governor of the State Bank of Pakistan (SBP), Dr. Murtaza Syed, has dismissed the idea that Pakistan was on the verge of an economic collapse, claiming that Pakistan’s was not as vulnerable as was being perceived in light of the increasing worldwide inflation.
On Saturday, during a podcast by the State Bank of Pakistan about the general state of the economy, Dr. Syed spoke about the prevailing economic situation.
The SBP governor emphasized in the podcast that Pakistan was not at risk ‘since it was covered by the International Monetary Fund (IMF)’.
He gave the examples of Ghana, Zambia, Tunisia, and Angola, as those nations that would suffer economically as they were not included in the IMF program.
He also said that the rising global inflation result in those countries without an IMF program suffering “badly”.
On Saturday, he had told Reuters that Pakistan’s $33.5 billion in external finance requirements for the fiscal year 2022–2023 had been addressed in full. He also stated that “unwarranted” market worries about Pakistan’s financial situation would pass in the coming weeks.
He further stated that Pakistan’s debt-to-GDP ratio was 70%, which was lower than that of Sri Lanka, Ghana, and other nations with which comparisons were being made.
He indicated that it was necessary to look into short-term debt. In our situation, it represents seven percent of all external debt.
“Looking at the terms of borrowing is also crucial. Only 20% of our external debt is on commercial terms; the remainder is on concessional terms, which are simpler to repay,” he stated.
He emphasized the need to examine how policies should be adjusted while outlining the steps taken by the SBP and the government to streamline the economy.
He added that because Pakistan’s growth rate was “doing well”, the country could afford to slow the economy, citing the recent interest-rate increase as one of the measures.
Dr. Syed said that due to the “inflation super cycle”, the upcoming year will be “tough” for the world’s economies.
According to SBP Deputy Governor Dr. Inayat Hussain, the country has enough reserves to see it through the upcoming months.
