Islamabad: International Monetary Fund warned that PakistanRunaway inflation rose to a 47-year high in August, prompting protests and instability in the cash-starved country as devastating monsoon floods exacerbated its economic woes.
The country’s inflation, as measured by the Consumer Price Index (CPI), rose to 27.3% this August. This level of inflation was last seen in 1975, when the reading was recorded at 27.8%. Observers said inflation could rise further in September due to floods and disruption in food supplies.
The IMF’s executive board earlier this week approved the seventh and eighth review of the $6 billion stalled loan package to Pakistan. State Bank Of Pakistan (SBP) received much-needed $1.16 billion in deposits last Wednesday.
In its country report released on Thursday, the IMF said the war caused high inflation and a dire global financial situation. Ukraine Will continue to put pressure on Pakistan’s economy, putting pressure on its exchange rate and external stability.
Given the very complex domestic and external environment, the risks to the approach and program implementation are high and downward sloping, the report said. “Policy slippage remains a risk, as evident in FY22, exacerbated by weak potential and powerful vested interests, given the uncertain political setting with the timing of elections,” said Global Moneymaker. Told.
The report noted that socio-political pressures are expected to remain high and may also affect policy and reform implementation, especially due to the weak political coalition in office and its low majority in parliament.
“All of this could affect policy decisions and undermine the program’s financial adjustment strategy, jeopardizing macro-financial and external stability and debt stability,” it said.
The lender warned that higher food and fuel prices could trigger protests and instability, which in turn could jeopardize macro financial and external stability and credit stability.
In addition, higher interest rates, higher-than-expected growth slowdown, exchange rate pressure, renewed policy reversals, weak medium-term growth, contingent liabilities related to state-owned enterprises and climate change have been rated as substantial risks by the IMF. was described.
The country’s inflation, as measured by the Consumer Price Index (CPI), rose to 27.3% this August. This level of inflation was last seen in 1975, when the reading was recorded at 27.8%. Observers said inflation could rise further in September due to floods and disruption in food supplies.
The IMF’s executive board earlier this week approved the seventh and eighth review of the $6 billion stalled loan package to Pakistan. State Bank Of Pakistan (SBP) received much-needed $1.16 billion in deposits last Wednesday.
In its country report released on Thursday, the IMF said the war caused high inflation and a dire global financial situation. Ukraine Will continue to put pressure on Pakistan’s economy, putting pressure on its exchange rate and external stability.
Given the very complex domestic and external environment, the risks to the approach and program implementation are high and downward sloping, the report said. “Policy slippage remains a risk, as evident in FY22, exacerbated by weak potential and powerful vested interests, given the uncertain political setting with the timing of elections,” said Global Moneymaker. Told.
The report noted that socio-political pressures are expected to remain high and may also affect policy and reform implementation, especially due to the weak political coalition in office and its low majority in parliament.
“All of this could affect policy decisions and undermine the program’s financial adjustment strategy, jeopardizing macro-financial and external stability and debt stability,” it said.
The lender warned that higher food and fuel prices could trigger protests and instability, which in turn could jeopardize macro financial and external stability and credit stability.
In addition, higher interest rates, higher-than-expected growth slowdown, exchange rate pressure, renewed policy reversals, weak medium-term growth, contingent liabilities related to state-owned enterprises and climate change have been rated as substantial risks by the IMF. was described.