In its latest critical review of the economy, the International Monetary Fund has assessed the gross external financing requirements of Pakistan at $16.2 billion for the current fiscal year. However, the review also indicates external vulnerabilities and fundamental contradictions in the external sectors as the economy is not only facing rising current account deficits, but also pressure on the foreign currency reserves. The donor agency has favoured this nation by revealing the facts and figures about the nature of external debts which have reached $87.1 billion. This belies the fund’s own optimistic projections of the country’s economy as it admits the challenges of external vulnerabilities, widening current account deficits and rising medium-term external repayment obligations. The government is claiming the credit of a stereotype performance by accepting external financing from various donor agencies. The life of expatriate Pakistanis in Middle East is going from bad to worse, lowering the volume of their remittances, imports are burdening the current account situation and exports failed to be picked up. Now the agency wants the government to withdraw subsidies on electricity and other utility services and it is yet to be seen how it will respond and manage the financial affairs.
According to experts, the gross external financing requirements could increase to $19.7 billion during the coming years but many hard facts could be concealed from the public to keep the inflow of foreign investments unhindered. It is also assumed that the current account deficit will reach $10.1 billion and external debt payments will be $6.2 billion during the current fiscal year. The government figures for the last fiscal year put the deficit at $11.5 billion. However, the government has projected the current account deficit at $9 billion, but experts put the real figures close to $13.5 billion for the fiscal year 2017-18.
Pakistan’s trade deficit remained a record $32.6 billion during the fiscal year 2016-17. Though the prime minister had announced an export package of Rs 180 billion, the exports are expected to decline further while imports will record a significant growth in coming years. Unless the government generates money through its own resources, it will be difficult to boost the national economy by depending on foreign loans and grants. The government should also curtail the interference of foreign donor agencies in the financial affairs of the country.
