US encourages crisis-hit Pakistan to continue working with IMF - here’s why
US also encourages crisis-hit Pakistan to continue working with the IMF, especially on reforms that will improve Pakistan's business environment.
The United States on Thursday urges crisis-hit Pakistan to improve its business environment which would make the South Asian country more attractive and competitive around the world. Currently, Pakistan is struggling with its worst financial collapse and is in talks with the International Monetary Fund (IMF) for financial assistance.
Speaking to media persons at a news conference here, State Department Spokesperson Ned Price said that Pakistan has encountered economic headwinds of late, while the citizens are facing record levels of inflation.
"This comes on the back of the extensive flooding through parts of the country. And it has only put a spotlight on our need to continue to work together to help the Pakistani people to help put themselves on a sustainable economic path and a durable path to the prosperity that we seek for the Pakistani people," he said.
He further said the US encourages Pakistan to continue working with the IMF, especially on reforms that will improve Pakistan's business environment. “We know that doing so will ultimately make Pakistani businesses more attractive and competitive around the world.”
According to Ned Price, Pakistan is a country with tremendous potential, and the US has partnered with Pakistan.
"We want to make sure that the resources that Pakistan has itself, the resources that the United States is contributing, that other countries are contributing and the resources that have and will continue to come from international financial institutions, they're managed responsibly as part of responsible and responsive governance,” he added.
Pakistan economic crisis
Pakistan's economic crisis is getting worse with every passing day. As per the latest report, the country's external debt rose sharply by 38% to PKR 20.69 trillion by the end of January 2023 as compared to the year-ago period.
The pkrevenue report mentioned that the State Bank of Pakistan (SBP)'s external debt was PKR 14.98 trillion in 2022 January. The rise in debt could be attributed to massive devaluation in the local currency against the US dollar, the report added.
The local unit recorded a decline of 51% to the greenback as the exchange rate by the end of January 2023 was PKR 267.94 as against PKR 176.74 by end of January 2022.
Pakistan's government's overall debt jumped to PKR 54.94 trillion by end of January 2023. Domestic debt has increased to PKR 34.26 trillion by end of January 2023. While the long-term loans of the country increased to PKR 27.51 trillion.
The government has also increased tax rates, policy interest rates, cut ministers' expenses, etc to meet all demands laid by the IMF to unlock the next tranche of $6.5 billion bailout package.
(With PTI inputs)
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First Published:10 Mar 2023, 06:47 AM IST
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