Pakistan Default News: Record inflation, hunger and unemployment… what will happen if poor Pakistan defaults, understand the big danger – what will happen if pakistan defaults just like sri lanka amid biggest economic crisis
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Moved towards poverty in December itself
In December 2022, the country’s foreign exchange reserves had reached five billion dollars. Along with this, the risk of its becoming a pauper had also increased. If experts are to be believed, people continue to deny the possibility that the country has reached poverty. It was decided by the Central Bank of Pakistan (SBP) that the Letter of Credit (LC) required for imports will be opened in such a way that the dollar reserve can be saved for a long time.
Its purpose was that the government could get some time and it could get the help of friendly countries. As well as getting a bailout package from the International Monetary Fund (IMF). The bailout package from the IMF will be reviewed for the ninth time. Pakistan’s rupee is falling historically. There was a big drop in it last week. Due to this the market also became apprehensive.
IMF team in Islamabad
The IMF team is currently in Islamabad. This team will look at the review. It was believed that the review would be completed at the right time but it could not happen and now the crisis has deepened on the country. From the middle of November 2022 till the end of January, Pakistan’s crisis has deepened day by day. Now many people are understanding that the economy of Pakistan is moving towards poverty. For a country like Pakistan, defaulting on commercial loans or going bankrupt means defaulting against commercial loans to a greater risk. Bilateral loans can be called back but multilateral loans are subject to maturity. It is because of these multilateral debts that a country is in trouble.
Pakistan Economy Crisis: Pakistan has that treasure which will remove its poverty in one stroke, will earn 100 billion dollars every year
Zero production and poor condition
If Pakistan’s currency reserves fall, then the Central Bank will not be able to make payments. Because of this, agencies like Moody’s and S&P will downgrade the country’s rating. At the same time, no one will trust Pakistan at the international level and it will lose its credibility. Pakistan has so much debt that it has reduced dollar reserves. In such a situation, he can import only as much goods as he exports. This country is also dependent on those Pakistanis settled abroad who send dollars. Pakistan will have to keep its current account at zero. There are many such imports for Pakistan which it cannot afford. In such a situation, there will be a direct impact on exports. Production in the economy will be zero. In such a situation, the results would naturally be very bad.
The secret of inflation and unemployment
The Pakistani rupee will lose its strength and it will lose its prestige in the world. Inflation will be on the sky and those who have local currency will also prove useless. Due to lack of production, the economy will shrink further. Some people will have money but they will not be able to buy anything. In such a situation, unemployment will be at the highest level. In the year 2022, the situation was perfect in Sri Lanka. Sri Lanka had stopped the repayment of foreign debt of seven billion dollars. It had a foreign debt of about $ 51 billion. While the currency reserves were only $ 25 million left. Pakistan has foreign exchange reserves of three billion dollars left. It has a foreign debt of $125 billion. In December 2022 itself, this country had moved towards Sri Lanka.
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