The International Monetary Fund (IMF) has refused to provide financial aid to Pakistan, which is currently experiencing a severe economic crisis, at a time when the situation is getting worse. This decision is a significant setback for Pakistan, as the IMF will not be sending any assistance to help the country during this crisis.
The crisis-hit-nation is considering reducing the salary of government employees by 10 per cent as a counter-measure to this. To address the crisis, the government is exploring various options, such as decreasing spending on government departments by 15 per cent. They also plan to cut down the number of federal ministers and state ministers, and the remaining officials would work without receiving any compensation.
The government of Pakistan had asked the IMF to send a team to conduct a review of the country’s economic situation. There were many speculations that the IMF would intervene and provide aid to Pakistan to help it overcome its economic crisis, which is considered the worst in the last 10 years, however, the request has been denied by the IMF.
Furthermore, the crisis-hit-nation had reached out to various nations, including the IMF, to ask for financial help as it is currently facing one of the worst inflation crises in recent years. The country has experienced a 70 per cent increase in gas prices and a 30 per cent increase in electricity bills.
Recently, the foreign exchange reserves in the State Bank of Pakistan (SBP) reached an all-time low of $4.343 billion, which is enough to cover only two weeks of imports. Pakistan has been struggling with a balance of payment crisis, with its foreign exchange reserves falling to $4.6 billion, barely enough to cover three weeks of imports, mostly for oil, as reported by Reuters. In 2019, Pakistan received a $6 billion bailout, which was later increased by an additional $1 billion in early 2021.
