Islamabad [Pakistan], January 24 (ANI): With over 8,500 containers still stuck up at the seaports of Pakistan, the concerns reached a peak that experts sounded alarmed regarding the financial crisis with fears that the nation could go become bankrupt, The Express Tribune reported.
Pakistan is running out of money and at the same time the country is witnessing a spike in food prices. Moreover, Pakistan's coffers are also running dry.
On one hand, importers are unable to get over 8,531 containers cleared due to a shortage of dollars. The shipping companies, on the other hand, are now threatening to suspend Pakistan's operations over the country's failure to make timely payments.
The country's situation is getting worse as the central bank of Pakistan has a paltry USD 4.4 billion in reserves - barely enough for three weeks of imports - while the estimated needs to clear the containers and pending requests for opening more letters of credit stand in the range of USD 1.5 billion to USD 2 billion, according to people in the industry and government sources, according to The Express Tribune.
Moreover, the government has stopped over USD 2 billion in payments of dividends, which will hurt future investment prospects.
Pakistan is already facing a 25 per cent inflation rate and the breakdown of the supply chain may cause hyperinflation in a country that might be in for more imported inflation due to steep currency devaluation.
Pakistan was seeking the release of a loan from the International Monetary Fund (IMF). After the revival, Pakistan's reserves slightly bounced back to USD 8.8 billion before again depleting to USD 7.8 billion when Miftah Ismail left the command of the Finance Ministry, reported The Express Tribune.
The economic strain can be seen in the imports. The central bank a few months ago started stopping the majority of the imports through administrative controls and arm-twisting tactics.
This week, the governor of SBP said that they have been solving between 5,000 and 6,000 cases per month. They have resolved 33,000 since May 2022. But many businesses that are essential for the continuation of daily economic and social life have been declared non-essential to lessen the import bill.
Meanwhile, the industries were also kept shutting down temporarily. One of the industries, Beco Steel Ltd halted production until further notice owing to delays in the approval of letters of LCs.
Its inventory levels have seen "significant reductions" with a negative impact on the supply chain. Not only these industries but around 100 types of businesses have been hit by the list of non-essential Import Items under the Import Policy Order 2022, as per the report in The Express Tribune. (ANI)